The 19-year-old has been impressive again this season, scoring a fine goal in the recent win over Dinamo Zagreb.
It’s further evidence of his quality having played 26 first-team games last season and scoring seven goals.
He’s a midfielder with an almost effortless ability to play game, whose vision and guile mark him out as a star of the future.
Arteta, himself a creative midfielder during his playing career, is hugely impressed with what he’s seen and believes City provide the best possible environment in which he can develop.
“His potential is limitless,” Arteta said. “He is going to set his own limits.
“The most important thing is that, as a club and around the team, we have created a really healthy, inspiring and challenging environment. That’s exactly what he needs.
“The door is open. We have a manager who trusts in young players and he’s going to get opportunities.
“With that type of environment, to grow and to always be going in the right direction is the most important thing.
“I think he’ll be very successful.”
Foden is now a regular for England U21s and many feel he could make a push to be part of the senior squad for this summer's European Championships should Gareth Southgate's side seal their qualification.
However, securing a regular starting berth at City is one of the most difficult tasks facing a young player, given the quality at Pep Guardiola's disposal.
It's a challenge Foden looks capable of meeting, though, with Guardiola recently describing him as the heir to David Silva.
Arteta says Foden’s love of the game is his most potent weapon and believes he has the mental strength to become a City and England regular.
“For me, his best attribute is his passion for the game,” he said. “How much he wants to learn and what he’s able to do to improve.
“Of course, he’s got the skills and physical ability and he’s got a very good coach and very good team-mates who are going to help him.
“His mentality and passion to succeed is what is going to make him one of the best.”