The Reds skipper confirmed in the week that negotiations surrounding an extension to his contract, which expires at the end of the season, are not near completion.
He went on to suggest that should he not receive an offer that he could leave his boyhood club as he has no intention of retiring just yet.
Brendan Rodgers yesterday revealed that his side are ready to thrash out a contract with their captain, but City are waiting in the wings.
Pellegrini is sure that, although he’ll be 35 by next summer, Gerrard still has plenty to offer, and has been encouraged by his move for Frank Lampard.
The Sky Blues are also keen on his home grown status, which would be a boost for the domestic and European squad quota – which are low due to the amount of foreign players signed by the club in recent years.
It’s unclear as to whether or now ‘Stevie G’ would be interested in relocating to the Etihad Stadium, but a last shot at Premier League glory may tempt him.
Gerrard has rejected lucrative deals to join Chelsea and Real Madrid in the past to stay with his boyhood club, whom he captained to Champions League glory in 2005.