City face the Gunners at the Etihad this weekend looking to bounce back from Monday's 2-1 defeat by Chelsea.
The result cut their lead at the top of the table to just two points over Manchester United but England ace Milner believes they will resurrect their winning run on Sunday.
He said: "We are pretty devastated but it adds even more incentive for us to bounce back from this disappointment and put it into a performance at the weekend.
"We will learn what we can from this game and move forward. We have the hunger to go and win again at the weekend."