Rovers pulled off the bottom spot of League One last weekend with a 2-0 derby win over Scunthorpe, and could climb out of the relegation zone if they beat Barnsley at Oakwell on Saturday.
Rovers beay City 3-0 on penalties in midweek after the two teams were deadlocked at 1-1 after 120 minutes at Belle Vue, and Penney believes it can prove a catalyst for an improvement in form.
He said: "We've got a lot to do in the League, but this will give the players bags of confidence to push on.
"Manchester City showed us a lot of respect by playing their strongest side. They wanted to win this competition.
"We know we have no chance of doing that but we will enjoy the moment anyway."
Rovers beay City 3-0 on penalties in midweek after the two teams were deadlocked at 1-1 after 120 minutes at Belle Vue, and Penney believes it can prove a catalyst for an improvement in form.
He said: "We've got a lot to do in the League, but this will give the players bags of confidence to push on.
"Manchester City showed us a lot of respect by playing their strongest side. They wanted to win this competition.
"We know we have no chance of doing that but we will enjoy the moment anyway."