The former 'keeper has also criticised the way things are being run at the club.
City were highly disappointing last season as they failed to retain their Premier League title or indeed keep up with eventual winners Chelsea.
They were also poor in both domestic cup competitions and the Champions League, with the pressure having increased on Pellegrini as a result.
If they fail to challenge for the title next season that pressure will increase further, but James thinks they could miss out on the title and even the top four itself as they are the weak link of the current group.
“I generally think Man City of the top four are the weak link,” the Mirror reports him as saying.
“Man City, again, they have got all this talent, they have won the title twice — or rather tripped over the line twice. Look at Chelsea last season. The title was won in November. If Arsenal had started better, I think Chelsea would have carried on longer just to win the league by ten, 15 points, whatever.”
Manchester City model isn't right
The former 'keeper also says that the model the club is currently working under isn’t one that is set up for long-term success.
City have once again spent big this summer, with Raheem Sterling arriving for a big money fee while Fabian Delph and Patrick Roberts have also joined.
It has become a regular thing for City to spend big money each summer, but James says that spending vast amounts and expecting success is not the right way of operating.
“I don’t see the Man City model being right, just spending loads of money and acquiring players,” he added.
“It isn’t necessarily the model of continued success. I have seen changes elsewhere and at the moment I am not seeing that at Man City. It is just spend a bit more and expect success.”