Arteta, 31, left Goodison Park on transfer deadline day in August 2011 following six seasons on Merseyside, where he had become a key player.
The Spaniard is glad to see the Toffees have not come unstuck since Roberto Martinez took over from David Moyes, whom he beat with an impressive 1-0 away win at Manchester United on Wednesday night.
Everton are in fifth, behind Liverpool on goal difference, and trail leaders Arsenal by seven points after the Gunners midweek win over Hull.
And Arteta knows his old side will provide a stern test of just how far Arsene Wenger's men can go in 2014.
"Everton are having a great season and they have got great results against top teams, which is not easy," he said.
"It was a big result (at Manchester United), it was massively important for them and will boost their confidence, so we are going to face a really difficult team for sure."
Arteta added: "I know the fundamentals of the club and I was happy with the way they dealt with the transfer window.
"I think they did really well and improved the team compared to where they were before. They deserve to be (up) there."
Denmark striker Nicklas Bendtner, standing in for rested leading frontman Olivier Giroud, scored his first Arsenal goal since March 2011 when he headed the Gunners in front after just 90 seconds against Hull at the Emirates Stadium on the way to a 2-0 win.
The result was achieved despite Wenger making several changes to the starting XI. The likes of England trio Theo Walcott, Jack Wilshere and Kieran Gibbs were on the bench, along with club captain Thomas Vermaelen and vice-skipper Arteta.
Arteta, who came on as a late substitute for Aaron Ramsey, feels strength in depth will be vital.
"We have struggled in the last years a little bit to do that because of the numbers and injuries and now we have almost everyone fit, apart from Lukas Podolski and Alex (Oxlade-Chamberlain), that is a very good sign," he said.
"I think it (competition for places) is great. Everybody has to be on their toes and everybody is important.
"We are going to need everybody if we are going to achieve something. I think it's a good thing."
There is little respite ahead for Arsenal, who face a difficult away assignment against Napoli for their final Champions League group match next Wednesday before a crunch clash at Manchester City on Saturday lunchtime.
Arteta, though, insists the Gunners squad are brimming with confidence as they chase down a first trophy since 2005.
"The difference to previous years is we are top of the league when by now we would be 10 or 12 points behind whoever was first before, that is a big difference," he said.
"The confidence and atmosphere is different and we want to maintain that.
"Does it matter we don't have the experience of winning the title before? No - as long as you have the quality, the ambition and togetherness that we have, I think we are in a good position to do it.
"That is where we are and I think the Christmas period is going to be massively important."
German forward Lukas Podolski is set to join in with the first-team squad again as he steps up recovery from a hamstring injury, while Walcott could come into contention to start this weekend after being ill in the build-up to the Hull match.
Midfielder Mathieu Flamini, meanwhile, is reported to have tweaked his groin on Wednesday night and so will be assessed.