"I worked here at Bayern and I know the mentality of this club. It's everywhere, it's in the skin of the club. They believe they can do it," said Guardiola, who was head coach at Bayern from 2013 to 2016 before joining City.
The German giants were thrashed 3-0 by City in the first leg of their quarter-final tie in Manchester last week, and are now facing what seems to be mission impossible ahead of the return fixture in Munich.
"It will be a miracle if we pull it off, but we can't just talk a miracle into existence," admitted Bayern coach Thomas Tuchel on Tuesday.
Bayern can count on the return of striker Eric-Maxim Choupo-Moting, who missed Bayern's last three games with a knee injury but took part in training on Tuesday.
"We'll have to see how his knee reacts to our final session, but if we get the green light he is definitely an option," said the Bayern coach.
Senegal international Sadio Mane will also return to the squad after he was suspended for a dressing room altercation with team mate Leroy Sane in Manchester last week.
Tuchel insisted that Bayern had put the episode behind them, while City midfielder Gundogan warned that it could even help the German side.
"Sometimes an episode like that can have a positive effect. That's what Bayern will be hoping for," said Gundogan.
The German international also insisted that a Bayern comeback was not off the cards on Wednesday.
"We know from our experience in the past that everything is still possible. This competition is something special, you can get incredible results. We are taking it seriously because we are playing against one of the best teams in Europe," he said.
Bayern defender Benjamin Pavard, meanwhile, pointed to the unlikely Champions League comebacks made by Liverpool in 2019 and Barcelona in 2017 as proof that Bayern still had a chance of reaching the last four.
"We've seen the remontadas (comebacks) there have been in the past, so why not us?" said the French international.
"We are ready, the crowd will be important and we are going to do everything to win this match," he added.