There has been much debate about the strength of United in the past week as their form took a turn for the worse with three successive defeats.
United sit in an unaccustomed position of seventh just over halfway through the Barclays Premier League season, 11 points behind leaders Arsenal.
By contrast, City are in a rich vein of form and are just a point off the top, but Pellegrini refuses to write off the reigning champions.
He said: "The major rivals are the teams that are very near. Arsenal sit top, one point on top of us and Chelsea is one point behind.
"But we are absolutely sure Manchester United will continue fighting to the end, because they are used to doing it, and Liverpool and Everton are teams that will continue fighting to the end.
"They play very well, both teams, so maybe five or six teams can fight for the title."
Confidence is high at City after a run of 14 games unbeaten in all competitions since their last loss at Sunderland in November.
In that time they have scored six against Arsenal and Tottenham and won away at Bayern Munich.
They faced some tough games over the Christmas period but came through unscathed and thrashed West Ham 6-0 in the first leg of their Capital One Cup semi-final in midweek.
Pellegrini, whose side travel to Newcastle in the league this weekend, said: "It is going very well of course, we are in a very good moment.
"But we are just in the middle of the season, we are just preparing for a good (end to the) season.
"We have very important games in the games in the coming days because all the games are knockout, except Premier League, which will be a very close until the end of the year.
"We must win here against Blackburn Rovers or we are out of the FA Cup.
"Maybe in the Capital One we have made a big step towards the final but in February we start again in the Champions League.
"It is very important to continue and to understand we must continue in the same way."
City have been outstanding in attack this term and have already notched up 92 goals in all competitions.
Sergio Aguero - currently injured - leads the way with 19 of them but Alvaro Negredo's hat-trick on Wednesday took him to 18 while Yaya Toure has 13 and Edin Dzeko 12.
Pellegrini claims he has no magic formula other than preaching his attacking footballing philosophy.
He said: "I just try to manage the group and the players the way I think is best to play football.
"There are a lot of different ways to manage and a lot of different ways to play football.
"In my career I chose one and that is as a creative team.
"Normally for the players, they like to play as a creative team and destroy teams and not just score one goal and go back, just to keep the difference.
"This is a creative team and we are trying to work in the same way in the week."
Pellegrini's efforts have been recognised with the Barclays Premier League manager of the month award for December.
He said: "I'm very pleased, but not for me. That represents that the team played really well in December.
"I said when I arrived here to be an attractive team.
"That is very important, not only to win trophies, but for me and the team. It is the way we must play."
Key midfielder Toure has also been honoured this week by being named African Footballer of the Year for a third time.
Pellegrini said of the Ivory Coast international: "It is not easy to win it three times as the best player from Africa, a continent that has so many players playing everywhere.
"It is very important for him and very important for the club, so we are very happy for him."
Toure is fit for the trip to St James' Park on Sunday having run off an ankle problem against West Ham.
He was hurt early in the game at the Etihad Stadium but played on until being substituted in the 66th minute.
Pellegrini said: "Yaya is okay. There was a little pain in his ankle but nothing important."
Aguero remains on the sidelines but is back in training and could return next week while winger Jesus Navas is also available after being rested due to a knee issue.