The Citizens won the Premier League title last weekend after Manchester United suffered a surprise 1-0 loss to West Brom at Old Trafford.
Manchester City are 16 points ahead of second-placed Manchester United, while Liverpool FC are a further points adrift of the champions.
However, Liverpool FC were 5-1 winners against Manchester City in the Champions League quarter-final earlier this month.
The Reds were 3-0 winners against Pep Guardiola’s side at Anfield before a 2-1 comeback win in the return leg at The Etihad.
Manchester United, meanwhile, came from 2-0 down to win 3-2 against Manchester City in the derby on Eastlands earlier in April.
Former Manchester City defender Dunne warned would-be title challengers Liverpool FC and Manchester United that there is a big gap to make up.
“They are 16 and 17 points is the gap between Man City, Man United and Liverpool,” Dunne told Irish radio station Newstalk.
“To make that up over the course of a season is very hard. They are a long way ahead.”
The Reds will take on Serie A giants AS Roma in the Champions League semi-final later this month.
Liverpool FC signed Netherlands international Virgil van Dijk in a club record £75m deal from Southampton in the January transfer window.
Manchester United brought in Chile international Alexis Sanchez in a swap deal from Arsenal earlier this year.
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