The Gunners travel to Signal Iduna Park on Wednesday to meet last season's runners-up in Group F of the competition, with both teams tied on six points along with Napoli.
Dortmund ran out 2-1 winners in the reverse fixture at the Emirates Stadium last month, and Ozil feels that victory proves Jurgen Klopp's men have the quality to go all the way in the tournament in 2013-14.
When asked by Bild whether Dortmund could go one better than their 2-1 defeat to Bayern Munich in May's final this time around, he said: "Sure, why not?
"A team that wins in London is of course one of the favourites. Dortmund was already a strong team in the past season and my impression is that they are better than ever."
Arsenal sit top of the Premier League by five points following their 2-0 victory over Liverpool at the Emirates on Saturday.
And Ozil is backing his side to maintain their domestic form and challenge for the title, explaining his happiness at playing in the English capital after his September switch from Real Madrid.
Asked whether Arsenal could win the league, he responded: "Why not?
"Whoever, after 10 games, is five points ahead, also has the potential to stand in front at the end of the season.
"To be honest, at Arsenal everything is fun. The coach, the players and life in London - I really feel comfortable."
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