Milner finally completed his drawn-out ¦pound;23million switch from Aston Villa last week and made his debut in Monday's 3-0 victory over Liverpool.
And Richards is certain the 24-year-old will prove to be an astute piece of business by Roberto Mancini.
"James has brought a new dimension to the team," said the defender.
"When he first came people said he was overpriced. They said all he does is work hard. Now they know has a little bit more in his locker than that."
He added: "He can use his right foot and left foot and has plenty of skill. His awareness is superb, so hopefully he can improve and bring that to the rest of the team."
A City player from his academy days, Richards, who looks to have again missed out on a place in Fabio Capello's England squad despite his outstanding form so far this term after he was named in Stuart Pearce's Under-21 squad on Tuesday, is better placed than most to assess the startling transformation at Eastlands since Sheikh Mansour took command.
"The club has changed ridiculously," he said. "I am just glad to be a part of it.
"Roberto Mancini has come in and bought all these players. There are some outstanding players in the team now but, luckily for me, I am still in the starting line-up."
Richards' status is a reward for the hard work he has put in trying to eradicate concentration flaws that came to the fore not long after he became the youngest defender in England international history under Steve McClaren in 2007.
But, even if it appears he will be overlooked for the opening Euro 2012 qualifiers against Bulgaria and Switzerland next month, Richards is unlikely to be ignored for long if he keeps improving at the present rate.
"I have worked on my concentration because sometimes I have tended to switch off a little bit," he said. "That is when the danger comes. But it is a weakness the manager is trying to help me put right."
Source: PA
Source: PA