The Dutchman coached Gladbach between 2007 and 2008, although he was dismissed with the side on the brink of relegation.
They went close to going down again in 2011 but, under the guidance of Lucien Favre, they have returned almost to their former glories.
"They have taken things step by step, planning intelligently economically and improving constantly," Luhukay told the Rheinische Post newspaper.
"Gladbach now deserve to be where they are at the top. I'm sure they will be fighting for a place in Europe right to the end of the season."
That no longer looks likely to be the path his own side follow, despite looking odds on for a place in Europe at the midway stage of the campaign.
"This first half of the season raised the expectations in us a bit too high," Luhukay said.
"People have got to stop talking about the Europa League. That's not our objective this season, nor in the next two or three years.
"I don't want to make us out to be smaller than we are, but it's a fact that there are a few years between these two sides and Hertha have lost ground due to relegation."
They have also lost a bit of ground since the turn of the year, but not enough for Gladbach coach Favre to take them lightly.
"The league table says all you need to know about Hertha's quality, particularly their record away from home," said the Swiss at a press conference.
"They're deadly, and we know that."
Hertha may be without Filip Daems and Christoph Kramer due to injury while Oscar Wendt has been ruled out once again.
Havard Nordtveit will also need replacing after his red card last weekend.