Burnley came from 2-0 down to take a surprise point from the Etihad Stadium thanks to second-half goals from George Boyd and Ashley Barnes.
While Dyche's men will go into 2015 in the Premier League relegation zone, the point against the champions could prove key in helping stave off an instant return to the Championship.
Dyche was delighted to end City's nine-match winning run, but reserved particular praise for his team's character and belief.
Asked whether he was happy with the turnaround after the break, he told reporters: "I was delighted with the first half if I'm honest.
"You're coming to a tough place with some fantastic quality players and seeing behind the scoreline is often what we have to do.
"But we got in at half-time, I felt, intact with the way we were playing. I reminded the players of that and we put down a marker with the first goal.
"We built on [the first half] not only with the early goal but the relentlessness nature of the performance. I thought the quality was high, the endeavour was high and the organisation.
"You can go 2-1 here and the game doesn't look any different. These players can dominate games, particularly here, and I didn't think they did second half.
"I was pleased with the goal but the follow-on from the goal and the mentality after that, it shows great signs.
"There are no guarantees going forward but it's fair to say there are obvious markers being laid down about how the team are performing at this level."
Burnley's memorable draw follows just two days on from their narrow 1-0 defeat to Liverpool, with Dyche opting to name an unchanged XI.
However, he dismissed suggestions that his side's fitness was particularly noteworthy.
"It's incredible people are making that point, when I used to play if the team was playing well it played," he added.
"I don't overthink it, there's no excuses from us. If we think they're ready to play they'll play.
"I think we're seven games less than last year, we're not in European competition, so they're ready to play. I never question the physicality of the group.
"I know the stats, I know how it works and the players are ready to deliver."
