The Chilean has guided City into the knockout section of the Champions League for the first time.
And having scored 14 goals in their last three games, all wins, Demichelis feels City are now starting to show real promise.
"We have to make sure the team remains on the path we are on and keeps improving," the Argentine defender told Radio Cooperativa.
"He can find a way to win, he has a way of making sure his teams play in the way he wants, that we play effective football and that we can challenge for important things.
"We are in a good place now and we will have to see what happens afterwards."
Demichelis admits that Champions League progression was very important.
"The most important thing was to reach the knockout rounds," he said.
"It is always important to have objectives that are greater than what you have achieved in the past. To get to the round of 16 was our first objective and we have achieved it.
"It is a very difficult competition, very demanding. You can play any of the enormous teams in Europe in the last 16 but the manager has very clear ideas of what he wants from the squad.
"But there is still a long way to go. Now, it is important to finish the next two games well and to make sure that the team stays on the path that the manager wants."