The City boss, speaking ahead of tomorrow's trip to Burnley, says more than two teams challenging at the top is the norm in the Premier League and expects the Foxes to remain in contention
"I think it’s typical for this league for there to be many, many teams doing well," said Pep.
"The last year there has just been one or two, but Leicester is there because they are doing incredibly well since last season.
"When Brendan took over he changed the way they played, we knew that when we played them in the last game. They are doing fantastically well"
Pep also said he likes to hear his players say they will never give up on the title.
John Stones is the latest to say the Blues will fight until the end and Pep admitted it is important the squad keeps its belief.
"That is good," he said.
"They have to believe. They have to believe we will win tomorrow. They can’t think too much about the people in front.
"We have to think about what we need to do to win the games. We have to try to be more solid with the chances we have and the chances we concede.
"At Newcastle, we had 26 shots, not all on target. We have three one on ones with the keeper.
"They scored two goals, apart from Maximie’s shot there was nothing more for Ederson.
"We always try to score more and concede less, but unfortunately we couldn’t win."
Watch the full video above