City, second in the standings and three points behind leaders Arsenal with one more game played, will be hoping to close in on the top spot after they recovered from their recent slump to stroll past Aston Villa with a 3-1 victory on Sunday.
Title holders City will find inspiration from last month's FA Cup victory over the London club, which they won 1-0 at home.
"So far, they are the best team in the Premier League," Guardiola told a news conference on Tuesday.
"We felt it a couple of weeks ago (in the FA Cup). The commitment, they are sharp. It will be a big, big battle. You have to be ready.
"I do not truly believe one week ago we are out of form and now we're back in form. Every game is different, you can play good and win and everything is perfect but tomorrow you could lose.
"Tomorrow is an important one, everyone knows it, and we'll try to do our best."
Guardiola also rejected claims that Sunday's win has provided his side with a renewed spirit, highlighting how the togetherness in his team is not swayed by results.
The Spaniard added: "After (the) Arsenal (victory) there was this togetherness, they are incredible human beings. I have no complaints. Everyone makes mistakes, me first.
"The mood is good, really, really good for many years. Many things happen, (such as) success, (but) sometimes little things must be adjusted to understand things differently.
"We are delighted to be together not because we win against Villa or lose against Spurs (Tottenham Hotspur)."
Pep apologises to Gerrard for 'stupid' comments
Guardiola was left issuing a public apology to former Liverpool captain Steven Gerrard (42) after a bizarre outburst in a news conference last week.
Guardiola was stern in his defence of the club amid more than 100 charges of alleged financial misconduct by the Premier League and referenced Gerrard's slip in 2014 against Chelsea which helped Manchester City to pip Liverpool to the title.
He had said: "Some moments belong to us - they absolutely belong to us regardless of the sentence.
"The (title-winning) goal from (Sergio) Aguero, when (Mario) Balotelli slipped (in 2012)? I don't know if we are responsible for Steven Gerrard slipping at Anfield. Was that our fault? I have respect for Steven Gerrard - but that moment belongs to us."
But looking ahead to Wednesday's match at Arsenal, Guardiola began his news conference by expressing his shame at those "stupid" comments.
"I apologise to Steven Gerrard for my unnecessary and stupid comments I said the last time about him. He knows how I admire him and his career, what he has done for this country that I am living and training in," the Spaniard said.
"I am ashamed of myself, what he said because he doesn't deserve it. I truly believe my comments in my previous press conference to defend my club but I didn't represent my club well putting his name in these stupid comments.
"I apologise and I said to him personally but I have to do it here as well. I'm so sorry for him, for Alex, his wife, kids and family because it was stupid."
