The 30-year-old was not included for the upcoming friendlies against Ghana and Tunisia and has also been benched for Villa’s last two games.
And Gerrard believes both instances have helped provide a spark.
“He has had his strongest week this week,” Gerrard said.
“I think that is a combination of coming out of our team and coming out of the Brazil squad.
“Knowing what is inside Phil – the character , the man , the player – I think he is sleeves up at the moment and we have seen that in training this week.
“He has been the top performer by some distance. That is where we need Phil Coutinho because that is when you see the Phil Coutinho that we love.
“That is one example of it but the City performance has made 80 per cent of the squad feel better about themselves in reality.
“How they perform is my responsibility and my coaching staff.
“But it was really good to see and if they can do it against that level of opponent individually and in the duels over 90 minutes, they can do it against anyone in this league and hopefully that performance makes them realise that.”