The Spain international underwent a scan on Thursday after limping off after just nine minutes of the 2-0 defeat to Alan Pardew's side at the Etihad Stadium.
Silva will now miss some crucial games including Sunday's derby against Manchester United as well as the midweek Champions League clash against CSKA Moscow.
"David is a very important player but we have a squad and we will have to replace him with another player," Pellegrini told reporters.
However, there was better news for the reigning champions with Yaya Toure expected to be fit to face Manchester United despite being substituted against Newcastle after picking up a groin problem.
The Ivory Coast midfielder is still recovering from the knock, but Pellegrini believes "he will have no problems to play."
City have an excellent record against their local rivals having won the last three Premier League meetings but Pellegrini is expecting a difficult encounter on Sunday.
"On Sunday it will be City versus United and last year was the same. It was not me versus [former Red Devils boss] Moyes and this time it's not me versus Van Gaal," he told reporters.
"For supporters it's a special game and we know that. We know what it means to win against Manchester United."
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