"I would like to have English players, believe me, but they are so expensive," the Spaniard was quoted as saying by BBC on Tuesday, March 8.
"I would like to play with English players. When I was in Barcelona I liked to play with locals because they feel something special, but sometimes it is not possible."
The five England players in City's first-team squad are John Stones, Raheem Sterling, Fabian Delph, 19-year-old defender Tosin Adarabioyo and reserve goalkeeper Angus Gunn.
Stones made City poorer by 47.5 million pounds (around $57 million) when they signed him from Everton in August and he is one of the five English players in City's squad.
"That is why the club has worked for a long period with the academy, thinking about the next years," the 46-year-old said.
"With me or without me -- hopefully with me -- I would like to enjoy these four or five guys who are growing, and play with them."
England goalkeeper Joe Hart is on a season-long loan at Serie A club Torino.