Neville believes City, even without strikers Sergio Aguero and Gabriel Jesus who are doubts for the game through injury, boast an attack which can truly test Liverpool's weakened defence.
Speaking on the Gary Neville Podcast, Neville said: "I think Jurgen Klopp will be nervous of what could happen, they will be more exposed.
"I'm looking forward to seeing Manchester City vs Liverpool this Sunday because that will be a real test.
"We'll get a good guide as to where City are this season and where Liverpool are without Van Dijk."
Gary Neville identifies Jurgen Klopp concern ahead of Liverpool's crunch clash vs Man City (Image: GETTY)
Liverpool were without Virgil van Dijk, Joel Matip and Fabinho in their recent clash with West Ham, prompting Klopp to hand a Premier League debut to Nathaniel Phillips alongside Joe Gomez in defence.
Neville added that he thought the additions of Thiago Alcantara and Diogo Jota were good moves by Liverpool but he believes they will look to bring in some cover for Van Dijk in January.
"I thought the signings of Diogo Jota and Thiago were clever, they (Liverpool) supplemented what they already had," he added.
"It wouldn't surprise me if in a few weeks time they go and deal with that issue of Van Dijk and maybe bring in a centre-back just to get them through, whether it's on loan until the end of the season or a more permanent solution."
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Liverpool are looking to add to their trophy haul this season (Image: EXPRESS)
Despite the loss of Van Dijk to an ACL injury, Neville believes that top sides like Liverpool are able to "find a way to win when they're not at their best" and he believes they will be able to cope without the Dutchman.
"Liverpool, at this moment in time, have an ability to play below their best," he told the Gary Neville Podcast.
"We know why. The blow of Van Dijk's injury must be huge.
"I played in seasons with Manchester United where Cantona was taken off for the kung-fu kick and Roy Keane got injured at Leeds away and other seasons where you miss big players.