McCarthy created Palace's equaliser against City in the game's 90th-minute, feeding Wilfried Zaha to run down the left-wing and whip in a ball which led to Fernandinho turning into his own net.
Assessing McCarthy's hand in the goal and time with the club since the summer, Hodgson said: "He’s been excellent and he’s getting better and better. We knew it would take a little time. He was training with Everton, so when he came to us he was technically fit and there was nothing wrong with him but of course he was not that close to the first-team for periods of time, not knocking on the door if you like.
"I knew the more he did with us, the chances he would get, he would get stronger and stronger. The action he performed for our equalising goal was quite incredible. That amount of running at that point in the game and to produce that pass was a class act. My faith in him and his faith in himself and determination to get back to that level of football has been rewarded. When you get these serious injuries which take you out of football for a long period of time it’s not easy."