With Pep Guardiola serving a one-match touchline suspension, the former Arsenal and Everton player will take charge of City tomorrow as we get our Champions League campaign under way against Lyon.
And he says the Club has put together a “phenomenal” side capable of winning Europe’s elite prize.
“For me, we have the best players in the world,” Arteta said. “I look at them and think they are the best.
"I know their qualities and their weaknesses - they are absolutely fantastic. It’s incredible.
"What is being created is phenomenal.
“That’s the aim [to win the Champions League]. We have a young squad, they have gained experience and we feel better prepared than in the previous two years.
"We are preparing every single detail and learning from the past because we believe we can do better.
"Tomorrow starts a new competition.”
Last season saw City exit the competition at the quarter-final stage after a disappointing defeat to Liverpool.
But City start this season as many people's favourites to win the competition after our record-breaking Premier League campaign that saw us become the first side to secure 100 points in a top-flight season in England.
Asked what changes the Club's technical staff have made to improve our performance on the European stage, Arteta said: "We are always adapting and evolving the way we play. A lot depends on players available.
"We have to change system. We can’t be predictable. Teams have the technology to work you out. We have to innovate and do things opponents don’t expect us to do.
"You have to get to important moments with players available, attention to detail, be lucky, have players hitting top form at right time. In this competition, if you make a mistake, you are out."
Arteta joined City in the summer of 2016 immediately after Guardiola’s appointment as manager, and quickly became the boss’ main sounding board.
There was plenty of talk in the summer Arteta could be tempted away after being linked with a number of management positions elsewhere.
But he remained at City – and he says he is delighted to be at the Club and feels he is learning plenty under Guardiola’s tutelage.
“Pep had a very clear role for me when he asked me to join the club," he said.
"I had played in the Premier League for years. We knew each other from before and we clicked quickly. We think in the same direction.
"My learning here has been incredible. That will continue.
"I am privileged to be here and I am very fulfilled. But if you ask me one day will I be a head coach, the answer is probably yes. But we have fantastic momentum and there is lots of room for this club to grow."