On a weekend where leaders Chelsea clinched the League Cup, champions City fell to a 2-1 loss at Anfield - meaning they remain five points off top spot having played a game more than Jose Mourinho's side.
With the top two back in action in midweek, Pellegrini's men - who were also beaten 2-1 at home by Barcelona in the UEFA Champions League last Tuesday - can ill-afford another slip-up against the division's bottom side on Wednesday.
"We will see the reaction in the next game," the Chilean told reporters after the Liverpool defeat.
"I hope that the team will recover and we can win on Wednesday because every point we drop means it is more difficult for the title.
"We are worried about our team, not the other teams that are behind us.
"It is important to try and continue playing the normal way."
City have a clean bill of health as they seek to do the double over Leicester, having won 1-0 at the King Power Stadium in December thanks to Frank Lampard's first-half strike.
Since that defeat, Nigel Pearson's side have taken just eight points from a possible 30 - putting them five points adrift of safety.
But even though time is running out for Leicester to avoid an immediate return to the Championship, Pearson is remaining upbeat after a narrow defeat to Arsenal and a 2-2 draw at Everton in their last two games.
"We've tried to build on some of the positive performances of late, in particular the Arsenal and Everton performances, which have been very encouraging," he explained.
"We probably deserved more out of both those games, but there's no getting away from the fact that we've got to get better results.
"Obviously the next game gives us a very tough test, so it's important that we're positive but also that we play as well as we can."
Leicester goalkeeper Kasper Schmeichel will miss out against his former employers, as he remains one to two weeks away from returning after a foot injury.
