Phillips returned to City after a loan spell with Ipswich Town last season and has been training with the team for the new Premier League season.
According to reports, Phillips has been making a positive impression on the training pitch, which has put him in contention for a spot in the starting lineup for the derby match.
This would be a significant boost for Phillips' career, as he had faced doubts about his fitness and weight issues after England's World Cup campaign.
However, Phillips and his mother had previously expressed concerns about his future at City, suggesting that he might be sold by the club.
Now, two years later, Phillips is back in the mix and could potentially earn a start in the highly anticipated derby match.