Chelsea's interim boss has studied how his side played against City at Eastlands in February when they lost 2-0 in a match in which Frank Lampard missed a penalty.
Benitez will rotate his squad to bring in fresh legs from the side which progressed to the Europa League semi-finals in midweek and insists he knows the key to reaching what would be his first FA Cup final at Wembley after winning the trophy at the Millennium Stadium with Liverpool in 2006.
Benitez, whose side lie in third place in the Barclays Premier League, seven points behind second-placed City, said: "They're a good team, in a good position in the table and did well against Manchester United the other day.
"We know it'll be difficult, but it's a semi-final in a massive competition.
"We know what we did wrong against them in the league and we'll make sure we don't make the same mistakes.
"They're a good team, a strong squad. They have a manager (Roberto Mancini) with experience and they have confidence at the moment. We know we'll have to do our best if we want to progress."
Sunday's match against a City side who have not conceded a goal in this season's FA Cup will be Chelsea's sixth game in 16 days.
Striker Demba Ba, recovered from an ankle injury, is likely to come in and defender Ryan Bertrand is also fit again after illness. Ashley Cole (hamstring) and Gary Cahill (knee), however, remain unavailable.
Benitez said: "We've tried to manage our squad and we have players with some fresh legs. Hopefully we will be fine. We have too many games and we have to use the squad. Everyone has to be on their toes but they are doing really well."
If Chelsea can beat City it means a cup double remains up for grabs for Benitez after his side edged shakily past Rubin Kazan 5-4 on aggregate in the Europa League quarter-final following a 3-2 defeat in Moscow.
They are now the last British side left in Europe and Benitez was confident after being drawn against Swiss champions and Tottenham conquerors Basle in the semi-final, thus avoiding a long journey to Fenerbahce or a tricky tie against Benfica.
Benitez said: "Basle is not too far away, so maybe it's not a bad option, only because of that. They're a good team, an offensive team, and will be dangerous as well. We saw what they did to Tottenham.
"We know there's a great atmosphere in their stadium and they play with intensity. I think it will be interesting."