Last week's bombshell announcement from UEFA that City face a two-year continental ban and a £24.9million fine for "serious breaches" of Financial Fair Play rules has put a new complexion on their already mouth-watering tie with Zinedine Zidane's Madrid side.
City are appealing against their punishments and have adopted a bullish tone but if the ban stands this season could be the last opportunity for them to win the trophy they most desire under Pep Guardiola.
"It's a huge game," Zabaleta said of Wednesday's first leg at the Bernabeu. "It's been a tough week for the whole of Man City: the players, the staff, everyone.
"But I think this should bring everyone together. It's the competition the club has been trying to win. Some of the players have been here so long.
"Of course it will increase the motivation of everyone at the club."
Zabaleta spoke to a number of his old colleagues when West Ham visited the Etihad Stadium on Wednesday night, losing 2-0, and sensed a unity in the dressing room.
"They trust the (board), what they have done," said Zabaleta, who replaced the injured Ryan Fredericks in the second half. "The coaching staff and players should focus on what is going on on the field.
"In the league the gap to Liverpool is too big but the Champions League is going to be huge. They've played Real Madrid before. Of course they are a huge club with great players but I'm sure Man City can beat them.
"A lot of City fans will travel to Madrid to support the team. The players and staff will come together. They have the mentality you need for those games.
"They have to play to win the game. They have the quality and that's the way the team always plays. Hopefully they can get a good result and then the second tie here, the atmosphere will be massive."
News of the ban has sparked plenty of speculation about the club's star players. While Guardiola has promised to stay, the vultures will surely be circling for the likes of Raheem Sterling, Kevin De Bruyne and Sergio Aguero if they are banished from Europe.
"I think some of the players will show loyalty to the club for sure," Zabaleta said after visiting the City dressing room. "Some of them have been here so long, they've won all the domestic competitions.
"The Champions League is massive but if they've been here for so long it's because they felt it was the right place for them."
With UEFA's case hinging on the accounts filed between 2012 and 2016, there have also been suggestions that the club could be stripped of the Premier League title won under Manuel Pellegrini in 2014, but Zabaleta brushed off questions about potentially losing one of his winners' medals.
"I think it is too soon to talk about this," he said. "We cannot talk about these things until we see (about the appeal).
"But nothing has changed for us."