Manuel Pellegrini has warned that Joe Hart has to return to his best form quickly or face being dropped, with the Manchester City manager stating that the goalkeeper has reached "the top maybe too young".

Hart, 26, was at fault for Cardiff City's second goal in his club's shock 3-2 defeat in south Wales on Sunday when he flapped at a corner to allow Fraizer Campbell to score. This followed the mistake 11 days previously in England colours, when Hart allowed James Morrison's shot to slip through his grasp for Scotland's opener in a friendly at Wembley.

As Hart has been the unchallenged first choice goalkeeper for City and England for the past three years, to retain his sharpness he may require serious competition. And Pellegrini made it clear he will have it at City in Costel Pantilimon. "Of course Pantilimon has to have the competition with Joe Hart," he said. "It's a difficult moment but I think that players need trust in those moments."

The Chilean, though, was clear Hart's place is in danger. "For the moment Joe will continue being our goalkeeper," he said. "But I know and I spoke with him and he knows he must be quickly in the best shape again – his top form. I think he is a top goalkeeper. I'm sure that he will do it again."

With Hull City at the Etihad Stadium for the Saturday lunchtime game, Pellegrini will resist the option of dropping him. "Not at the moment but it doesn't mean [it will not happen]. My team [are chosen] with performance not names and Joe knows he has to perform well. But at the moment he has all the trust." Pellegrini is aware of Hart's uneven campaign last term. "I saw the complete last season but that is the past and now we must see the future and the best thing for the team is that we see the future."

The manager believes the goalkeeping expert he brought with him when succeeding Roberto Mancini earlier this summer can help Hart. "Joe is working with another goalkeeper coach, I trust a lot in Xabier Mancisidor," Pellegrini said. "He is a very good coach and I am sure that Joe must improve on a lot of things during the whole year.

"He is a young goalkeeper who has arrived at the top maybe too young. He needs to improve a lot and Xabier will improve it. For a goalkeeper 22 or 23 is young [Hart's age when he established himself]. But he has the quality to do it. That's why he's the No1 in England. We have all the trust in him and he will also be critical of what he's doing and he will improve."

With City hoping to sign another frontline central defender to join Vincent Kompany, Joleon Lescott and Matija Nastasic, Pellegrini denied City have been slow to act following Kolo Touré's departure for Liverpool on 2 July. "We have been trying to do it since the beginning. We needed one more defender [as well as] Kompany, Lescott and Nastasic. Dedryck Boyata is starting his career. We will try different names."

With Nastasic due to start against Hull after missing the beginning of the season with an ankle problem, and Kompany and Micah Richards, who can play centre-back, out with their respective injuries until after next week's international break, Pellegrini does not think it is a mistake not to have already added to this area of his squad.

While City are hopeful of signing Atlético Madrid's Martín Demichelis for around £3.5m before the transfer window closes on Monday, Pellegrini said: "It was not an error because we tried and it's not easy to bring a centre-back to the team – there are not a lot of them. Barcelona tried three in three months and it's not easy to get the player you need. Before next Monday we will see what we can do."

Pellegrini did admit to disquiet at the manner of the defeat to Cardiff. The winning third goal also came from a corner from which Pablo Zabaleta failed to pick up Campbell, who scored his second. "Of course, very angry, very disappointed, three very important points for us [were lost] but football has these things,." the manager said.

City have failed to emerge from the Champions League group stage in their first two attempts. Now, having drawn the holders, Bayern Munich, along with CSKA Moscow and Viktoria Plzen, Pellegrini said: "We have a difficult group, we have chances if we play well because we have [some] weaker teams."