The Etihad Stadium right-back was not particularly favoured by previous national team manager Fabio Capello, but the Italian resigned on Wednesday evening and this would have given Richards renewed hope.
Right full-back is one of the most competitive positions in the England side, with Glen Johnson and Kyle Walker both previously in front of the 23-year-old and Mancini wants Richards to take this new opportunity.
“Micah has everything to become a top full-back. I think he has improved a lot in the last year but he can still improve, he can do better,” Mancini is quoted as saying by Sky Sports.
“At this moment for the national team, probably Johnson or Walker are better.
"But I don't want to say Micah can't play for the national team - if he wants, Micah can play always.”
Despite the Citizens' manager being full of praise for Richards, he admitted there is room for improvement in the young defender’s game.
Mancini also pointed out that, with such a lot of competition for places in the squad, there was bound to be someone disappointed.
“If one England manager has a choice of three - Johnson, Walker, Micah - one of these players stays out,” added the Italian.
“Micah played for England with Capello but there are a lot of players in England and one manager can call only 20-22 for a European Championship.
“I think Micah can really be a top full-back but he needs to improve.”
Richards can continue his improvement during City’s race for the Premier League title, which they lead by two points over fierce local rival Manchester United.
The next challenge they face will be a clash with Aston Villa at Villa Park late on Sunday afternoon.