Lambert has taken enough encouragement from Villa's performances in recent weeks - including last weekend's 2-1 defeat at Arsenal - to believe they can at least compete against the champions.
He said: "I felt there were signs of encouragement against Arsenal but then I've felt that for a few weeks without getting the results.
"That's the frustrating thing, when you play well and don't get results especially the games at Everton, West Brom and Swansea.
"When you have a two-goal lead at Everton and West Brom and you don't see it through, or concede a late equaliser as was the case at Swansea, it's frustrating.
"If you had taken maximum points from those games, then you'd be sitting mid-table and, against Arsenal, we should have had at least a point."
Lambert added: "People are asking about the Reading and QPR games and I say to them, 'so there's no point in playing Manchester City then?'
"I don't view it that way. We may as well just give it to them if we think like that. We want to beat Manchester City.
"You are there to win, regardless of whether it is City or QPR or whoever. We have to try and win. We are a threat going forward. We are not going into it just to draw or anything like that."
Villa won 4-2 at City in the Capital One Cup and Lambert felt their opponents were flattered by the 5-0 scoreline in the league meeting after a contentious penalty award.
He said: "To go up there and beat them at any time, which we did in the Capital One Cup this season, is a hell of a result because of the players they have got.
"We also felt hard done by with the penalty they got against us in the league game when we were only losing 1-0 and in the game.
"It was never a penalty and a farce and there for everyone to see. That penalty incident at the Etihad will stick in the players' minds.
"Yes, We know how hard it is going to be. They are still a top side. They've just turned Chelsea over. They have some great players and are a top side.
"But I don't think we go into any game frightened of anyone. We have to take the challenge on."
Villa are only one goal away from reaching the 1,000 mark in the Premier League.
But Lambert said: "It will be only nice to reach that milestone if we win.
"Only if we win, does that statistic become relevant.
"There are 33 points available still and that's a hell of a lot of points to play for.
"I've said before it's going to be one hell of a ride to the end of the season, that's for sure. Never a dull moment, never is."
Villa skipper and central defender Ron Vlaar is battling to overcome the calf injury, which forced him out of the Arsenal game.
Striker Darren Bent remains doubtful with a foot injury but keeper Shay Given has recovered from a groin problem in time to be part of the squad against his former club.
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