According to Wikipedia, the resistance of #26 is 133.9mΩ/m. You have s total run of 40cm or 0.4m, so that's a resistance o 0.4*0.1334 = 0.05336. If the current is 0.85A, the voltage drop = V IR = 0.05336*0.85 = 0.045356V, so with 5V at one end, the voltage at the other end will be 5 - 0.045356 = 4.954644V, which will be no problem.
https://en.wikipedia.org/wiki/American_wire_gauge#Tables_of_AWG_wire_sizesThe only other thing you need to consider is over-current protection. The cable should be protected by a fuse or the power supply's current limit, which should be below the cable's rating. If the power supply can provide a much higher current, than the cable's rating and there's a short circuit, the cable insulation can melt, short circuit and present a fire risk.
As mentioned above, the current rating depends on the temperature rating of the insulation, whether the cable is bundled and the ambient temperature. Wikipedia says 1.3A, for #26 assuming the insulation is rated to 60°C, the ambient temperature is 20°C and it's not bundled with other conductors. You'll probably want it to run at higher ambient temperatures than 20°C, but the cable insulation will also be rated to over 60°C. According to the article below, PVC cable insulation (the most common type) is commonly ratted to 105°C. The next column in the Wikipedia table says 2.2A, with 70°C rated insulation, so it's probably safe to protect the circuit with a 2A or even 3A fuse, as cable insulation can probably take that current without damage.
https://www.performancewire.com/insulated-wire-protection/