Hughes has been able to strengthen his squad considerably since being appointed as manager last June.
He brought in a number of new faces last summer and added further reinforcements in January.
City's spending power means Hughes is likely to once again venture into the transfer market at the end of the season, but he is also concerned about the dangers of having too many players at his disposal.
"When I first got the job I thought the squad was imbalanced. I think it is better now, but there are some issues we have to address," he explained in The Guardian.
"Although we have bought players in, we haven't shed a great deal. We will have to do that because we have to have a manageable squad
"Ideally, you would want 23 or 24 and then have academy players of sufficient quality to back them up.
"If you have more than 25 it is difficult to have a meaningful training session and I have never been a manager to tell players that because they are not involved, they can train in the corner with the reserves."
MischievousOne player to be linked with a move away from the club is record signing Robinho, who has struggled of late after an excellent start to his City career.
The Brazilian was again below his best in the 1-0 defeat to Chelsea on Sunday but Hughes hopes to keep him for a long time to come.
"He is a key player and to say he that he is not in our long-term plans is simply to be mischievous," said Hughes.
"He is a great player and he wants to be successful."
Hughes concedes that Robinho does need to improve his performances on the road but feels the same could be said for most of his team-mates.
He said: "Away from home we have to find a way of getting the best out of the team and the best out of Robbie. In Europe we have got away with it, in the Premier League we have not."