Schalke will host last season's Ukraine Premier League runners-up in Gelsenkirchen before travelling east a week later and Neustadter says they are going to have their work cut out qualifying for the group stage for a second year running.
"It's a nice, exciting draw for us," he told Handelsblatt. "Ukrainian football has come on leaps and bounds in recent years and the euphoria there is high, particularly after the 2012 European Championships.
"The clubs have also strengthened and it's going to be a tight game.
"Personally, I'm looking forward to playing for Schalke in the land of my birth."
Some may feel Schalke got off lightly by avoiding the likes of PSV Eindhoven and Fenerbahce, but that is not the case according to captain Benedikt Howedes.
"There were only good teams in the draw," he said. "Therefore, we knew we would come up against tough opponents.
"I can't say I've been following Ukrainian football, but we saw with Shakhtar Donetsk last season what clubs from this league are capable of."