Sterling returned from a one-month injury lay-off as a late substitute against Newcastle United earlier this month, but failed to get off the bench as City strolled to a 4-0 victory against Stoke City last weekend.
He was also overlooked when David Silva picked up an injury during the semi-final first leg against Madrid, with youngster Kelechi Iheanacho chosen to replace the Spaniard.
Sterling eventually came on after 77 minutes and twice spurned opportunities to lead a counter-attack, and while Pellegrini defended the 21-year-old and hinted at his involvement against Southampton on Sunday, he also suggested that he will have to show what he is made of if selected to start at the Santiago Bernabeu.
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"When you arrive at this stage of the Champions League, I think it's very important to arrive at your best moment, as an individual player and as a team," he told reporters. "It's difficult for Raheem, to arrive at his best moment after one-and-a-half months when he doesn't play.
"But I think he can give to our team different options, depending on what he can do in his next game. But of course we bought him because he was a player who can make a difference and also because we are not just evaluating him for just one season.
"He is a very young player, he has a very important future, but of course big players must make the difference in these kind of games. Unfortunately for him, he was not 100 per cent in his best performance, before his injury."
Sterling started the season in fine form but had tailed off long before picking up a groin injury in the Manchester derby, but Pellegrini believes his first campaign as a City player will stand him in good stead for the remainder of his career.
He added: "I think this year will be a very important year for him. He's just 21 years old and I am absolutely sure he will have an important role here and for England.”