City lost 3-1 at home to Bayern Munich on Wednesday but they saw off previously undefeated Everton at the Etihad to leave the Chilean in buoyant mood.
"I was very pleased for a lot of things," he said.
"We played the only unbeaten team in the Premier League and a team that plays very well with the ball, so it was not an easy game.
"What happened last Wednesday always has a consequence physically and mentally on the team so that's why I am very pleased with the character the team showed."
City midfielder James Milner echoed those sentiments and admitted the return of David Silva after injury was an important factor in the recovery from their European defeat.
The Spain international had spent a month on the sidelines with a thigh injury but he played a key role in securing victory by setting up Sergio Aguero to score City's second goal.
"I think we played well against Aston Villa but ended up losing the game and we didn't perform up to our standards in midweek," Milner told the club's official website.
"It was important to bounce back against Everton, who are a very strong team. It was great to have David Silva back, too. He's a top player and any team in the world would miss him.
"There's great movement in this team and everyone is comfortable with the ball.
"That's what the manager is encouraging us to do, play with freedom in the final quarter of the pitch."