The 35-year-old former Republic of Ireland international left Fulham at the end of last season after the club's relegation from the Premier League.
Duff signed a one-year deal with Melbourne City, who are majority owned by the City Football Group, in the A-League in June.
Speaking to Perform on Tuesday, he said Chelsea – where he played from 2003-06 – deserved to be heavy favourites to claim the Premier League title.
"Obviously Chelsea are firm favourites," Duff said, speaking after featuring in a 5-0 pre-season friendly win for City.
"If [Jose] Mourinho doesn't win it in the first year, he always wins it in the second year. I don't think you can really look beyond them.
"They obviously had a good, strong win [against Burnley]."
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