While Arrows are currently in eighth place on the league standings, AmaZulu are in fourth and Durban City are in seventh place.
Richards Bay have enjoyed a productive campaign by their standards, sitting in 11th on the table
Mngqithi's charges complete their season with games against Polokwane City, Chippa united and TS Galaxy.
"It would be nice to have more than three KwaZulu-Natal teams in the top eight, but three would still be OK if you consider what happened last season.
"There has been a tremendous improvement in how KwaZulu-Natal teams have performed this year," Mngqithi said in the Sowetan.
"We should be very grateful for that because I think we all have very young teams, which is encouraging because it's a project that's ongoing with potential to improve."
Mngqithi added that the future is bright for KZN teams, who all boast a number of young stars.
"I think I am averaging around 22, probably with one or two players who normally increase that average, but I think the team has improved a lot in that regard.
"I see AmaZulu have some interesting youngsters including Zikhali, Hlangabeza and Maqokolo. They have a lot of boys who are really interesting with a good return on investment for KwaZulu-Natal.
"Durban have got very interesting young boys such [Kyle] Jurgens, [Samkelo] Maseko, [Saziso] Magawana.
"For me those are suggestions that there's a lot of positives in KwaZulu-Natal football. If you look at Richards Bay, those Mthembus [Moses], Zikhalis [Lindokuhle] in the midfield, they've also got huge potential," the coach added.
Mamelodi Sundowns' bid to pull clear at the top of the Betway Premiership suffered a major setback on Tuesday night after they were beaten 3-2 by TS Galaxy at Mbombela Stadium, a result that dramatically reshapes the title race.
Mamelodi Sundowns head into their final league match of the season knowing their dominance of South African football could finally be coming to an end.
Orbit College's final Betway Premiership fixture against Orlando Pirates will no longer be played at the Royal Bafokeng Stadium, after ongoing renovations ruled the 2010 World Cup venue out of action.
TS Galaxy will be forced into a key midfield reshuffle when they host Mamelodi Sundowns in a crucial Betway Premiership fixture at Mbombela Stadium on Tuesday night, kick-off 19h30.
