Jurgen Klopp's league leaders go into the crunch showdown unbeaten this season and with a six point lead over City at the top of the table.
But speaking to bwin.com, Richards, who made 245 appearances for City and helped them win the title and FA Cup, said: "I think City will win the Premier League this season.
"They've made it hard for themselves with the current situation at centre back, but City always do things the hard way.
"I would never back against City because the quality that they've got in the squad can turn a game on its head and the manager knows how to get the best out of every player.
"Kevin De Bruyne was a huge miss last season, but now he's fully fit he'll be like a new player and is pivotal in the way City like to play.
"I have to give respect to Liverpool because they are playing really well, but if they pick up an injury to one of their key men, then the team loses some balance. If (Mo) Salah, (Sadio) Mane or (Roberto) Firmino gets injured, it would massively impact the way they play and make it difficult for them to maintain that level."