The Frenchman has shone for City this season and was particularly impressive in the 4-1 derby demolition of Manchester United a fortnight ago, when he got on the scoresheet.
That contrasts with his erratic form of last campaign, when he was severely criticised by former boss Roberto Mancini.
At one point Mancini even said he could "punch" the 26-year-old, such was his frustration with a player signed for £24million from Arsenal in 2011.
Nasri turned the situation around with some strong displays in the closing weeks of the 2012-13 season and he feels Pellegrini has helped him maintain that resurgence.
Nasri said: "I am more confident with this manager. He has given me a lot of freedom.
"I'm a guy who likes to have affection with the manager. I like a manager who likes to talk about what's good and what's wrong.
"I'm still young and learning every day. When you have a manager who will talk it's always good for a player."
Nasri, however, like most of his team-mates, was unable to make an impact in Wednesday's Champions League defeat by Bayern Munich.
City were outclassed as the Germans delivered a masterclass to win 3-1 at the Etihad Stadium.
Nasri was taken off after a quiet 70 minutes but he is determined to respond as Everton visit in the Premier League this weekend.
He said: "I think I'm getting back to my best form - apart from Wednesday.
"But I will look to put that right on Saturday.
"You cannot be good every day, except if your name is Messi. Mine isn't - so I can have bad games."