According to the German international, the cup holders are even stronger than they were last season.
Arsenal went closer than anybody to knocking Bayern out of Europe last season, losing on away goals after a 2-0 win at the Allianz Arena failed to overturn a 3-1 loss at home in the first leg.
The two sides renew their rivalry at the Emirates on Wednesday with Arsenal hoping for a better outcome than last year, and Ozil is cautiously optimistic.
"I have huge respect for Bayern," he told Germany's Bild am Sonntag newspaper.
"They are even better than they were last year, but we're not going to hide.
"Anything is possible over two legs. I'm the kind of player who loves games like these."