Toure: Bayern setback proved City turning point
That loss, their only setback in 17 matches this season, has been over-shadowed by Carlos Tevez's refusal to follow manager Roberto Mancini's instructions to warm up before coming on as a second-half substitute.
Toure, speaking to Reuters in a museum on the banks of the River Thames, said the defeat and events off the field that night provided the catalyst for the side's winning run.
"I think that game was very very, important for us, so important. Before that we had won against Tottenham, and beaten some other teams and it was a good time to play against Munich.
"They are a very strong team, a very experienced team in the Champions League and in Europe, and we learnt a lot from that defeat - it actually gave us a lot of confidence."
The 28-year-old Ivory Coast international agreed that Tevez's refusal to play had affected his team-mates.
"Yes, it was the turning point. We still don't know properly what was behind that, but I think the most important thing from that night was that the team grew up," he said.
"Everyone knows that Carlos Tevez is a fantastic player, he's a very good captain, but we have done very well since then. Now the decision is in the hands of the club and the club will decide what happens next."
By the time of the defeat in Munich on September 27, City had won five of their opening six Premier League matches and drawn the other. They had also drawn 1-1 with Napoli in the Champions League and seen off holders Birmingham City in the League Cup.
But the loss raised questions over whether City were genuine challengers for the Premier League or Champions League titles. Results since, all without Tevez, indicate they are.
City are now five points clear at the top of the Premier League having beaten champions and arch-rivals Manchester United 6-1 at Old Trafford, and Saturday's come-from-behind 3-2 win at Queens Park Rangers was their fifth straight league victory.
Toure, now in his second season at the club, explained why City have improved since finishing third last season.
"I have already played in a lot of derby games, for Barcelona against Real Madrid, for Olympiakos, every city I have played in I have played a derby, but the City-United one was very special.
"I was very happy and very surprised to hear that it was the first time United had lost 6-1 at home for many years, and that was amazing because United are so tough at home.
"But the real story is that we have to keep working hard and improving. We know we have a chance this year - we might still be a small team compared to United, Chelsea and Barcelona but at the end of the season - we will see."
He said City's improvement was also due to most of the players having been together for over a year and the way Mancini was managing the side.
"The communication between the players is so important and you have to give the manager a lot of credit. Now it's a year that we have lived together, and a