Cancelo missed last weekend’s 0-0 draw with Sporting in the Champions League due to illness but he is back in training and is in line to feature at Selhurst Park.
Nathan Ake is also back in training to boost City’s defensive options.
As they look to reassert their six-point lead over Liverpool at the top of the Premier League, City will once again definitely be without Ruben Dias who has been ruled out for several weeks with a hamstring problem.
Kyle Walker was suspended in Europe but should return to the side at right-back.
City are certainly light at the back, with Pep Guardiola admitting the squad was becoming stretched.
He said: “We have a little bit of a problem, we don’t have many players available. Hopefully some of them come back.”
There are no such issues in forward areas though, and Guardiola has to decide whether to keep faith with the players that blew Manchester United away last weekend.
Phil Foden and Jack Grealish were particularly impressive in that win and will hope to keep their places, while Riyad Mahrez scored a brace despite being quiet for much of the match. Gabriel Jesus also got a run out against Sporting, so could come back into the squad.
Cole Palmer and Zack Steffen have also returned to training.
With no midweek fixture and a pressing need to keep winning matches as Liverpool pile the pressure on, City have no choice but to name a strong line-up at Selhurst Park.
Predicted Manchester City XI: Ederson; Walker, Stones, Laporte, Cancelo; Rodri, De Bruyne, Silva; Sterling, Foden, Mahrez.
Time and date: 8pm GMT, Monday 14 March
Venue: Selhurst Park