Richards, 19, still has three years on his current deal but is negotiating new terms after his meteoric rise from City's academy into the England set-up.
Eriksson said: "For every player, especially an international player, the Champions League is where you want to play. It is up to us to help him get there. If it will take a long time I don't know, but for now I think he is happy at City.
"He's happy, he's recently made his debut for England and he feels more and more important to this club.
"He's grown up here, so I can't see any reason why he'd want to move."