The City winger was on the bench for the 1-0 victory over Bournemouth on Saturday and is set to be part of the squad travelling to Luton for our FA Cup fifth round tie.
Grealish started the Champions League first leg at FC Copenhagen but looked dejected when he was forced off with an injury early in the 3-1.
Thankfully, the setback was not too serious and Guardiola believes he looks at his best as we enter the decisive part of the season.
“He started maybe a bit late but, the last month, Jack is back in terms of many things,” the City boss said in his pre-match news conference.
CITY+ | SUBSCRIBE TO ACCESS EXCLUSIVE CONTENT
“He played an important game in the Champions League in Copenhagen, [if you’re] playing bad you can be out.
“Unfortunately he had a setback after 10-15 minutes. But he recovered quickly and he’s back.
“Hopefully he will have the same impact as last season. It depends on him, and all of them. I try to be fair with my decisions.
“If he played a lot of minutes last season, and a little bit less in the start of this season, it’s the same player, same manager, same way we want to play. Nothing changed, just how you perform and that’s the difference.
“We need him, he has a special quality for our team and hopefully he can do well.”
With a busy schedule, Guardiola is being careful with his team selections but said that both Grealish and Kevin De Bruyne are available for the game at Kenilworth Road at 20:00 (UK).
“Yes it’s possible,” the boss added. “Normally when we play Saturday to Tuesday, with the demanding schedule of the past, I don’t decide on the line-up until after training.
“I talk a little bit with them, get a feeling. I don’t take a decision yet, never ever.”
Watch the second part of Pep’s press conference in the video above...