However, because the transfer window is now closed, Whitley can't be signed until the summer although McCarthy has said that he would have played a part in Sunderland's run-in if he was able.
"It's good to be able to play a few games at reserve level and the lads have been great," Whitley told the club's official website.
"It's just very frustrating that the transfer situation has worked out the way it has.
"The way the rules work, I can't sign and play for Sunderland this season and that is disappointing but I will just have to bide my time and wait until the time is right so that hopefully we can start talking.
"I've been encouraged by what Mick McCarthy has said about me and the fact that he wants me to carry on training here and playing for the reserves.
"I'm keen to stay. It will be a bit of a change from Manchester City because I spent so many years at Maine Road. I was there from the age of ten and I have great memories of my time there but I am looking to the future now.
"I know Sunderland look like they might be in Division One next season but that won't make any difference as far as I am concerned, I still want to join because this is a massive club and I'd be silly to turn an offer down.
"And if Sunderland do go down then I'm sure they won't be out of the Premiership for long."