Larsson helped Celtic knock the Catalan giants out of the 2004 UEFA Cup - a year after Martin O`Neill`s team reached the final.
But the former Barcelona striker declared the 2-1 Champions League win - courtesy of goals from Victor Wanyama and 18-year-old Tony Watt - as the greatest win at Parkhead in the club`s 125-year history.
Larsson, who scored 242 goals in 315 appearances for Celtic, told BBC Scotland: "It has to be the best one, without a doubt.
"Beating Barcelona with the team they have now has to be the best experience, it beats everything I have been involved in myself.
"But also the way you heard the fans through the television, everyone is raving about the atmosphere. They have to be pleased with that because they were absolutely fantastic again.
"It`s the best result against any team there at Parkhead because you`re playing against the world`s best team, and the amount of money they have.
"Being able to do that is fantastic and to see it shows you anything is possible in football. You might have a great team on paper but you still have to play for it."
Larsson now believes Celtic can go on and qualify for the last 16 - victory over Benfica in Lisbon could book their place with a game to spare.
The Swede said: "Can they bring that spirit and atmosphere towards every game? You don`t know where it`s going to end.
"They still have everything in their own hands. They know it`s going to be difficult but anything is possible.
"If they produce the same performance in the next game they might be there already."
Larsson is not surprised to see his former Celtic skipper Neil Lennon making waves in management.
"I wasn`t really hesitating that he wouldn`t do that," said Larsson, who is now managing Landskrona in his homeland.
"He was the leader when he played and always had a good contribution to the team.
"So for me that`s no surprise. I don`t think it`s a surprise to the general public either because he knows what he is talking about.
"They way they played against the best team in the world, almost getting a draw away from home and winning at home, was excellent. The game plan was fantastic and the players were excellent."