By FOX Sports Staff
The draw was the same result as the reverse fixture at Anfield earlier this season, and it meant that the Reds are still yet to beat a team in the top half of the table.
However, Gerrard is optimistic of a top four finish for Champions League football despite being nine points behind fourth-placed Tottenham and praised the performance against City as one of their best this season.
"It's certainly up there with our best performance of the season," Gerrard said, "We can take a lot of belief from the way we've performed against Arsenal (also 2-2 last Wednesday) and Manchester City.
"We need to build on this and I'm feeling really confident about our ability to move up the table. We might not have got the results we wanted against the top sides but every time we have certainly matched them if not bettered them in games.
"We just need to try to cut out our mistakes and turn those draws into wins. No disrespect to the sides we've got coming up but if we keep playing like that then we can certainly put in a challenge for fourth place.
"If we perform like that we will pick up a lot of points between now and the end of the season."
The arrival of Daniel Sturridge last month in a £12million move from Chelsea has provided the necessary spark manager Brendan Rodgers would have wanted.
Gerrard lavished praise on the former Chelsea and Manchester City striker after he struck against City to bring his goal tally to four goals in six apeparances.
"The team is looking really strong at the moment," the England captain told the Liverpool Echo, "Before the transfer window we were lacking a bit up front as Luis Suarez was almost having to do two jobs.
"But now Daniel Sturridge has come in and given us more options going forward. Daniel has done brilliantly for us so far."
Rodgers, having instilled a new way of working following his arrival at Anfield last summer, believes the players are finally starting to see the fruits of their labours.
He knows, however, for them to have long-term success they have to eradicate errors like the one which saw goalkeeper Jose Reina race from his goal only to be beaten by Sergio Aguero from the narrowest of angles to make it 2-2.
"That is all part of our growth but what was important for me was to see the confidence in the players and the desire and the quality," he said.
"They showed great character. We maybe are missing two or three players who can really help the group that clubs like Manchester City have but you can't fault the players.
"Going forward that is a positive for us. Once we cut out those mistakes then draws will turn into wins and we can become a real force because we have some really talented players.
"We are growing and building and our template in the game is improving all the time."
While the younger players are starting to impress more it was the 30-something stalwarts Gerrard and Jamie Carragher, back in the side for an extended run, who the Reds boss admits remain vital to their development.
"I thought they were brilliant," he added.
"Carragher marshalled the defence and put in two big performances in two big games (having played against Arsenal on Wednesday).
"He was up against top players - Aguero is one of the best in the world - and Steven Gerrard you have just seen him get better and better as the season has gone on once he has got a grasp of what we are trying to do.
"The senior players are vital for us. We have a lot of young, talented players who are going to need time to grow but whilst they are growing we have senior players who have been outstanding."