The Red Devils handed their bitter rivals the Premier League title last weekend following a shock 1-0 loss to 20th-placed West Bromwich Albion at Old Trafford.
Manchester United are 16 points behind Pep Guardiola’s side in the Premier League following a mixed second season for the 20-time English champions.
Jose Mourinho’s side are one of two Premier League teams who managed to beat Manchester City in the top-flight campaign to offer the Red Devils some hope.
The Portuguese head coach has spent £285m on new players since taking over the reins of the Old Trafford from Louis van Gaal back in May 2016.
Former Manchester City defender Dunne believes Manchester United can challenge for the title next term if Mourinho can bring in some new signings this summer.
“Man United have the financial backing to be able to form a strong squad this summer,” Dunne told Irish radio station Newstalk.
“Liverpool have been building for a couple of years and look really strong now.”
Manchester United haven’t won the Premier League title since 2013 when Sir Alex Ferguson was still in charge of the Old Trafford outfit.
The Red Devils signed Chile international Alexis Sanchez in a swap deal from Arsenal in the January transfer window.
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