City will see the 1-1 draw between the two sides on Tuesday at the Santiago Bernabeu as a positive result as the English bid to reach the UEFA Champions League final for only the second time in their history.
Pep Guardiola's side are on a 14-game winning streak on their home turf while only Brentford have gotten the better of the Citizens at the Etihad Stadium this season.
Real Madrid knocked Manchester City out at this same stage of the competition last season but Grealish feels his side are a better team this time round.
The England midfielder told BT Sport: “We have a new team this year, different players.
“We’ve learned so much since last year. Now we have the perfect balance of experience and a few youngsters who are just world-class.
“I think we just have quality and I’ve never felt so confident going on to the pitch and having these players around me.
“Within ourselves at the Etihad, we feel unstoppable there. We came here to try and win, but it shows our character to go a goal down – it’s always difficult to play at a place like this.
“In the end I think it was a fair result. They had their chances, we had a few as well.”
The winner of this tie will face either Inter Milan or AC Milan in the final.
