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Isco opened the scoring for the Blancos in the round of 16 first-leg tie, but Gabriel Jesus hit an equaliserbefore a Kevin De Bruyne penalty completed a remarkable turnaround for the visitors.
To make matters worse, Ramos was shown the 26th red card of his careerduring the dying moments of the match, which ensured he will sit out the reversefixture at Etihad Stadium through suspension.
Capello thinks Pep Guardiola's side will find plenty of gaps in a Madrid defence lacking a talismanic performer, and has ultimately backed them to qualify for the last eight.
The former Blancos head coach told Laureus: “I thought in the last two games that they played before the end of the season, Manchester City were on the top of their form.
“They are really dangerous when they go forward. In the past, I thought Pep Guardiola has made some tactical faults in midfield, but now, when they lose the ball, they try to recover it.
“The problem when you play City is how well can you defend against them?
“So I think, for me, I prefer Man City, because without Sergio Ramos, when you have to defend against City going forward, it will be difficult for Real.”
Asked if there is any chance of Madrid completing a turnaround in Manchester, Capello responded:“It's possible because, for Real Madrid, it's normal to play this kind of game.
“The pressure will help Real Madrid. They finished the Liga season brilliantly and they won the title.
“But I think they have one important problem. Without Sergio Ramos, when you have to defend, it will be really difficult.
“Sergio Ramos is the captain, is the leader in the dressing room, he's the leader on the pitch. The personality of this player is really important for all the players.”
Capello added: "Guardiola is changing his style. When he was at Barcelona, he played the famous tiki-taka, but now it has changed a lot.