Coady insists they can take encouragement after their performance in defeat to Liverpool on Boxing Day.
"It's another tough game and we all understand that," stated Coady. "The quality that Man City have is great, even though they aren't getting the results at the moment.
"We want to improve and get better. I thought in spells we were good (against Liverpool) but the result is disappointing for us, but we need to put it to bed and move on as quickly as we can.
"They (Man City) are a world class team and we're preparing to face a world class team, it's as simple as that. We know their manager and we've looked at their strengths and weaknesses and trying to counteract that."
He added: "We know how big it is and it's in front of our home supporters as well but we need to be at 100 per cent.
"Every game is a good opportunity. We know we have quality in the team and that we need to pick up points so you need to make sure you're ready, so we'll recover and make sure we are.
"We're always looking forward to playing at King Power Stadium, and we know we need to be at our best to get them at their best. They'll be there again on Sunday and we'll be ready."