City lie at the Premier League summit, two points ahead of Jurgen Klopp's side.
"To maintain that level… we did 99 points with someone else pushing us," he said. "We knew that if we dropped points Madrid were going to win the title."
He added: "It's similar with (Rafa) Nadal, (Roger) Federer and (Novak) Djokovic, no? They push one to be better than the other one because they know.
"We need it in sport, as athletes. They (the City players) know. I didn't tell them, but they know how strong Liverpool are.
"To compete we need good opponents close and this season we have it, here and in Europe."