Pep Guardiola’s side were knocked out of the Champions League on Wednesday after defeat to Monaco – and fell behind to a James Milner penalty early in the second half against Liverpool.
But City showed their character and desire once again to take a point and perhaps deserved more after a superb attacking display against the Merseysiders.
Sagna, who came off the bench for the final 25 minutes of the match, says bouncing back from the loss in midweek was hugely important with the international break looming.
"It was vital,” he said. “Even more vital because we are now separated for two weeks.
“We had to react and I think it was a good reaction. If we'd had the penalty for us before it might have been different.
“But reacting to a setback is part of the game and we did.
"We wanted to leave for the national team with a good result. We were at home, we knew it was a direct opponent, so we wanted to win the game.
“You can't afford to lose games though and at least we managed to come back from a goal down. We showed some character to come back at 1-1."
After the two-week break for internationals, City face a huge double header that sees them play Arsenal and Chelsea in the space of three days.
And at the end of April, City face the Gunners again, this time at Wembley in the semi-final of the FA Cup.
Sagna, who spent seven years at Arsenal, says hitting form immediately after the break will be important to City’s chances of finishing inside the top four and winning some silverware.
“It's going to be even more vital to come back after the break even stronger,” he said.
We need to go to Arsenal and win the game because we want to be part of the Champions League again next season.
“It's going to be difficult to catch Chelsea - it's maybe too far now - but we want to be qualifying for the Champions League.
“We have to go and give a good performance, stick together and keep working hard."