Held to a 0-0 draw at Sunderland this week, City now sit four points behind leaders Arsenal.
But Carragher wrote in his column for the Telegraph: "Manchester City do not have the same quality on the bench as Arsenal, but when Pep Guardiola has his best starting XI available they can embark on a title-winning run, especially with Erling Haaland in electrifying form.
"City are reminding me of Sir Alex Ferguson’s Manchester United. There were occasions when United were not always playing the best football in a particular season, but they had that know-how about how to win the league, so if they were still in the hunt in late March they would get the job done.
"If City are still within touching distance of Arsenal by then, Guardiola will be confident and Arsenal – especially their fans – will be nervous. That could yet be a decisive factor."