Holland, who tasted top flight football with Charlton Athletic and Ipswich Town, has been left impressed by City’s strong start but believes Roberto Mancini’s side are yet to be really challenged in the league.
“I think City are certainly favourites and rightly so after the start they have made this season and their result at Old Trafford,” Holland told The Sport Review.
“They havenâ€™t been tested as yet massively in the league. They havenâ€™t been behind in a game, they havenâ€™t had a difficult spell.
“You wonder when they have a spell when things are not going quite their way what will happen with the spirit amongst the team.
“But theyâ€™ve met every hurdle so far and overcome it.”
And the 37-year-old, who started his career as a youth player at West Ham United, praised Mancini’s man-management and believes the Italian coach has cultivated a strong team spirit at Eastlands. But he feels there are certain characters in City’s squad who could potentially upset the positive atmosphere at the club.
“Cityâ€™s team spirit is better and Mancini has got on top of the [Carlos] TÃ©vez situation and it sent out the right message to the rest of the team,” he continued.
“When [Edin] Dzeko got pulled off [against Bayern Munich] he had a moan about it but the next time he shook the managerâ€™s hand and sat down quietly, so I think Mancini got the right message across to the team that heâ€™s not to be messed with.
“So certainly that area is something thatâ€™s better. I still think there are question marks over the spirit there with [Mario] Balotelli if he explodes.”
And although Holland is expecting City to win their first Premier League crown this term, he is certain defending champions Manchester United will take the title race down to the wire.
“United have started the season very well but their form of late has not been inspiring,” he added. “I think it will be difficult at this stage for anyone to catch City. But you wouldnâ€™t write Sir Alex Ferguson and United off.”
Read Mattâ€™s thoughts on the npower Championship each week in his Football League blog at www.football-league.co.uk
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