The 20-year-old centre-back joined the Scottish champions on loan in the summer but has seen limited action at Celtic Park.
Despite being highly rated at the Premier League club, Simpson-Pusey was not registered for Celtic's Europa League squad and was left out of the matchday squad for the first nine Premiership matches.
His only appearance came as a starter at right-back in a match against Kilmarnock.
He was named on the bench for games against Dundee United and Aberdeen, but was left out of the team, by Wilfried Nancy, for every other match.
This was despite the manager using a three-centre-back formation and including other players in those roles who were not natural centre-backs.
Consequently, the Daily Mail is reporting that Manchester City will recall Simpson-Pusey in January.
The report suggests that City are dissatisfied with his lack of game time and that he is likely to be loaned to an English Championship club.
The significantly limited use of Simpson-Pusey this season suggests that the French manager will be exploring new centre-back signings to bolster his defensive setup.