Leaders Arsenal, who are six points clear having played one game more, travel to Etihad Stadium on Sunday (16:30 BST).
Speaking on The Wayne Rooney Show, he said City "know how to win the title" and "have a manager who knows how to do it".
"I think City will have the edge on that, just purely the manager and players they've got. They will be able to stay a little calmer than the Arsenal players," said Rooney.
"They will be worried because when you go on a run and lose a few games, you start thinking 'where's the next goal, the next win going to come from?' That negative mindset really has an impact on your performance."
Manchester City beat Chelsea 3-0 on Sunday to take advantage of Arsenal slipping up with a 2-1 defeat by Bournemouth on Saturday.
Rooney said that whoever wins Sunday's "title decider" in Manchester will be favourites to win the league.
He added that he thinks a draw will be a "good point" for Arsenal, who may need to "play dirty".
Rooney added Mikel Arteta's side must "be tough to break down, make sure there's no gaps between the lines and try to hit them on the break".
He added: "Whether the fans like that type of football or not, they have to do anything to stop City winning. They need to be resilient enough to stop City from scoring."
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