City will face the Catalan giants in the last 16 of Europe's premier club competition, having reached the knockout stages for the first time.
Barcelona - winners of the Champions League in 2009 and 2011 - are likely to provide a stiff test for Pellegrini's men.
However, the former Real Madrid boss believes Barca are not operating at the same standards they set under Pep Guardiola, and revealed his side have taken great heart from their recent triumph at European champions Bayern Munich.
"I think Barcelona will be very concerned that they have drawn us. They are not the team of two years ago," said the Chilean.
"The Bayern Munich result has given us a lot of confidence. We are improving every day and we must continue to improve."
City will be at home for the first leg against Barca on February 18, with the return fixture scheduled to take place at Camp Nou on March 12.
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