Klopp and Guardiola locked horns regularly when in charge of Borussia Dortmund and Bayern Munich respectively and the German is anticipating another fascinating encounter when the Reds visit the Etihad Stadium this weekend.
"These games are always important. I can't remember a game that was not important in the Premier League," Klopp told a news conference.
"We all know the quality of Manchester City. I thought the way they played against Monaco was quite impressive. City could have won the game easily but because they are human beings they are out.
"But their quality is really high.
"You have to win all the challenges, if you lose one it can hurt. We have felt good in these [big] games so far but, for me, they are the most difficult team to play.
"I know their image in this country is different, the Pep Guardiola style... but it's real football. It's difficult to defend against them. We know what we have to do but if we can do it, I don't know."
Klopp: "For me, City is the most difficult team to play against. We know what we have to do." pic.twitter.com/fqLR49eiKl— Liverpool FC (@LFC) March 17, 2017
He added: "I don't think we are the favourites. That's not too bad.
"We know that we can be difficult to play in games like this, that's true, but we have to be at our best to get anything.
"I am really looking forward to this, it's a real tactical challenge.
"It's an important moment in the season, but we know that it's possible to win."
Liverpool have had plenty of injury problems of late and, while the situation appears to be easing, striker Daniel Sturridge and captain Jordan Henderson remain sidelined.
Henderson could return for the Merseyside derby with Everton on April 1, however, while defender Dejan Lovren has overcome a knee problem and strikers Roberto Firmino and Divock Origi could be fit for this weekend despite missing training for much of the week.