The Gunners lifted the title for the first time in over two decades last season as the side cruised at the top of the table, finishing 7 points ahead of City.
This season Arsenal are the favourites to go all the way once again as the likes of City, Chelsea and Liverpool are under new management and are impossible to predict.
City, who have signed Enzo Fernandez and Elliot Anderson in deals worth well over £100M this summer, look like Arsenal’s main rival as fans look ahead to the title race.
Asked on whether Fernandez takes City closer to the title, Carragher revealed that he, as well as Anderson, could take the side to their first title in over 2 years.
"I think he does, certainly pushed them above Chelsea, and myself and plenty of others thought Chelsea would have a really good season. Some of that is off the back of not having European football and having a new manager. But losing Enzo Fernandez, who over the last two of three players, has been one of the big players for Chelsea.
"They've always had five or six top players but not a lot around that. They've now lost one of them - and he's gone to Man City. They look a lot stronger and they're going to be the biggest challengers to Arsenal now.
"It is a really good squad, there's been a lot of turnover over the last 12 months. Losing Rodri was really big thing and I thought it would be really difficult to recover from that.
“But if you said they'd bring in Elliot Anderson and Enzo Fernandez you'd say that's a top midfield. I think that gives them the greatest chance, ahead of any other team, and maybe the only team who can wrestle this title from Arsenal."
For now, Arsenal and City sit level on points after a perfect start to the season for both sides who, alongside Chelsea look like the challengers right out of the gate.