Claudio Ranieri's men are currently top of the Premier League ahead of their clash with the Blues, and the Chilean says that their exploits remind him of his former La Liga side
Claudio Ranieri's Leicester travel to the Etihad Stadium on Saturday as league leaders, three points clear of their opponents.
Pellegrini's City are still fighting on four fronts, with the club retaining hope of giving the 62-year-old a triumphant send-off before Pep Guardiola takes the reins at the Etihad from next season.
Leicester's sole focus, meanwhile, is the Premier League and the Foxes' favourable injury record is a leveller to the division's big spenders, according to the Chilean, who famously led Villarreal to the semi-finals of the Champions League in 2006.
"Leicester have a very good squad with not many players injured," Pellegrini told a news conference.
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"They play with the same team every week. They have fewer games than other teams but I think the merit of the squad is very important.
"In football, not only finances make the difference - of course you must buy players to win the title but every year there’s a surprise.
"Leicester are all thinking and doing the same thing at the right moment. That can equalise the finances.
"I don't know if you can compare but what we did at Villarreal was similar. We reached the semi-finals of the Champions League and finished second in the league.
"Maybe Leicester are not a team with a lot of possession but they defend very well with a lot of concentration and they counter-attack with a lot of speed. If you have the commitment of the players as a manager, that’s the most important thing."
Pellegrini will be without winger Jesus Navas against Leicester,with the Spaniard facing a minimum of three weeks on the sidelines due to a leg-muscle injury sustained during Tuesday's 1-0 win at Sunderland, but Vincent Kompany is set to resume full training next week following persistent struggles with a calf injury.