The Red Devils opened the current campaign in impressive style, with seven wins from eight games suggesting that they could come back into title contention.
City have, however, surged clear of the chasing pack over the course of the season, with Pep Guardiola’s side on the verge of taking the top-flight crown back to the Etihad Stadium.
United delayed a championship party with a thrilling derby victory last time out, but they are going to fall well short of their 'noisy neighbours' in the final standings.
Herrera concedes the Blues are the best side he has seen since the iconic Arsenal team which completed a full season unbeaten, telling Mundo Deportivo: “In any other year we would have competed for the Premier League, but we cannot take anything away from what City have done.
“I do not remember a better team since Wenger's Arsenal of the 2003-04 season, which did not lose any matches. If next season we are able to match or improve our record, we will be in the fight.”
Herrera believes that United are heading in the right direction, with the club well set for a runner-up finish 12 months on from slumping into sixth.
The Spain international midfielder said: “The data is there. It is true that last year we won three titles, but we finished sixth in the Premier League and we had to win the Europa League to qualify for the Champions League.
“You have to put everything in perspective. In England, the Premier League is given more importance than the Champions League and we are up on the previous season. We have done a good job but have found ourselves up against an impeccable opponent.”
Herrera added: “United's history is winning titles, not winning a derby. We have made that clear, but preventing a rival from winning the Premier League has important meaning.
“During the game I thought about those 4,000 fans who were at the Etihad and were going to suffer a setback that would have remained throughout history had we lost.
"No-one should underestimate us. There was no specific talk, just random comments and a collective reaction. We appealed to our pride and everyone tried to correct their mistakes to avoid City becoming champions."
United have six games to come in the 2017-18 Premier League campaign.