Ireland's future at City has been the subject of speculation in recent months with the player admitting last week he did not know if he figured in the club's long-term plans.
The former Republic of Ireland international is understood to have held a meeting with City's hierarchy to discuss his future with a number of clubs thought to be waiting in the wings to sign him if he leaves this summer.
Mancini believes Ireland's problems this season have been mental and he has called on the Irishman to be in the right frame of mind if he wants to resurrect his City career.
"I spoke to Stephen two weeks ago but we must speak again soon," said Mancini. "I don't know what he is thinking about his future but, for me, Stephen is a fantastic player and if he can change his head I think he can start to play like last season [2008-09] again."
Meanwhile, Patrick Vieira is hoping to agree a new deal.
Vieira joined City from Inter Milan in January on a short-term deal until the end of the season with the option of a further year.
Former Arsenal ace Vieira admits he was left frustrated with his form since his arrival, but he is excited about the potential at City.
"It has not gone the way I wanted because I wanted to give more of a contribution," Vieira said.
"The manager and the board believed in me and I wanted to repay the trust they had for me. I did right at the end of the season but unfortunately it was maybe a little bit too late.
"But I would love to stay. When you look at where the club was a few years ago and where the club is now it is really exciting.
"We need to talk and hopefully we will agree something."