The 26-year-old defender has missed one match so far this season for the Gunners, who have endured a tumultuous start to the campaign.
The 8-2 mauling at Manchester United was undoubtedly Arsenal's low point but Koscielny believes the side are capable of impressing in European football's elite competition, especially if they keep the back line tight.
"It is very important to defend together," he said of Tuesday night's match against Borussia Dortmund. "We have the quality.
"It is in our head to perform. We have intelligent players and we put the effort in on the pitch.
"We have new players who have arrived at the club, and it is important for us that they can provide some creativity technically in midfield.
"I think we can do something in this competition."
Koscielny is likely to start at the heart of defence on Tuesday evening alongside new signing Per Mertesacker.
The Germany international was signed on deadline day from Werder Bremen and the Koscielny believes he adds another dimension to Arsenal's defence.
"He is a very good defender with a lot of experience," he said.
"He is a German international, and is really important for us on the pitch.
"He is tall, which is good for our physical side. He will help me on the pitch with defensive corners.
"With Thomas [Vermaelen] it is very different. We must defend very well, and make a clean sheet more possible."
Mertesacker comes up Tuesday night against former foes Dortmund, who Arsenal last played in the 2002/03 season.
Current Dortmund skipper Sebastian Kehl played in the club's home Champions League victory nine years ago and is set to start again at Signal Iduna Park.
Dortmund head into the match on the back of a 2-1 defeat by Hertha Berlin that ended an 18-game unbeaten run at home, but Kehl hopes for better on Tuesday evening.
"We analysed the match we had on Sunday but we worked very hard," he said.
"It is a great thing to play a team like Arsenal and I hope we will show a better performance than the one we showed on Saturday."