The stakes are very high for boss Benitez, who has sent four players - Yossi Benayoun, Albert Riera, Glen Johnson and Fabio Aurelio - to Belgrade this week for controversial placenta cell treatment on their injuries.
Benitez said: "This is a big game, an important game. But then all Liverpool games are important. But this could be described as a make-or-break game for our season.
"We are aware of City's ambitions. They have spent some money on good players and they also have a good manager with experience. It will be tough, and important for us to win particularly with the Champions League game away to Debrecen next week. A good win will give us all confidence for that.
"We want to progress and we want to be higher in the table. We want to continue playing big teams and playing for something important. But it is too early to talk about final league positions, but clearly it is a big game for both clubs. But we must be confident we can win.
"I am not amongst the managers, 80% I am told, in the Premier League who believe City will finish in the top four. We will be in the top four."
He added: "We have to play well, and if we can play at the same level we had to beat Manchester United, we can beat anyone. I am not concerned about what critics say, only what is going on in my dressing room and the performance of my team.
"We have to win to get closer to the top of the table. We must keep winning to stay close to City, Aston Villa, Tottenham. If we do that it will give the players confidence. If we win games, and we have players back from injury, it will help create a very positive mood at the club.
"The aim is to kick-start our season. We must improve and a win will be a real lift for everyone."