The Yellow Submarine went down 2-0 in Italy on Tuesday night but have improved in La Liga of late after a poor start.
An opening-weekend thrashing at Barcelona was followed by a home draw with Sevilla and a 1-0 loss at Granada. A first win was finally secured at home to Real Mallorca and Villarreal followed that up with a hard-fought draw at Athletic Bilbao last weekend.
The disappointing defeat at Napoli aside, Valero is happy with the club's progress.
"I can see a line of improvement in every game and that's important," he told the club's official website.
"The Champions League is difficult - we knew that when we saw the group - but there are still possibilities and while there are we will keep on fighting.
"If you do not believe in yourselves, you do not believe in anyone.
"I think we have the team to compete with whoever, whenever.
"Last year we set the bar very high and that raises people's expectations but I think we can reach them."
Villarreal will be without striker Nilmar against Zaragoza due to the Brazilian suffering from a knee complaint. Argentinian Marco Ruben is also out after sustaining a foot injury against Athletic.
Zaragoza striker Helder Postiga believes his new club have deserved better so far this season.
Zaragoza have won just one of their opening five games but played well against big-spending Malaga last weekend and could have won it if Postiga, who joined from Sporting Lisbon in August, had not seen a goal controversially ruled out for offside.
"We would obviously be in a more comfortable position (had the goal stood) but we have to forget about these things and we expect to improve," said the Portugal international.