The 60-year-old boss believes his side can go into their Boxing Day clash against the champions with plenty of confidence after beating them on New Year's Day last season
The Wearside club currently sit in 15th place in the league, four points above Wigan and the relegation zone, after Steven Fletcher scored the only goal of the game in their 1-0 win over Southampton at the weekend.
They host City on Boxing Day and O'Neill is looking for the team to put on a decent showing similar to the one that saw them beat their illustrious opponents during the festive period last term, before singling out summer signing Fletcher for praise.
"It was a terrific win. There was a lot of character shown that day," O'Neill told reporters.
"I know these are over-used words in the game, but that was very important for us because Manchester City at any given stage in that match or in any game, can rip you apart."We conjured it from somewhere. [Dong-Won] Ji's goal was greeted with an enormous roar, which I shan't forget, and for us to win on the opening day of the calendar year gave us a big boost.
"He [Fletcher] has scored important goals. I am not so sure he has scored an unimportant goal for us - every goal we get is important.
"I have to say it's not that often that we are winning by three or four goals. His contribution has been fantastic so far."
The Black Cats, like plenty of other clubs up and down the country, though, will miss out on some of the festivities this year due to their playing commitments, but O'Neill believes it's a small price to pay for the privileged lifestyle that footballers lead these days.
He added: "It's the most phenomenal life you could get, particularly if you have a couple of years where you can be successful.
"I was lucky enough to be involved in a Nottingham Forest team which ruled Europe for a couple of years, so that was really fantastic."But any professional player has got to really enjoy it. You are being paid to keep yourself healthy and fit and if you don't have any major serious injuries, which are obviously more than a bit of a setback and terrible to endure, then it's a great career."