The defender is confident the Bundesliga champions can repeat their treble success from last season and believes Atletico Madrid can triumph over Gerardo Martino's men
Bayern won the Bundesliga title in record time after beating Hertha Berlin 3-1 last week and Dominguez believes that only Real Madrid or Barcelona can challenge die Roten for the Champions League trophy this term.
"Bayern are now the best team in Europe," Dominguez told Goal. "It's hard to stand up unless you are Real Madrid or Barcelona. Last year they won league, cup and Champions League very easily and this year they are on the same path."
The 24-year-old has also been impressed by Liga leader Atletico Madrid this season - the club where he began his career - and believes it has the quality to edge out Barca in an all-Spanish quarterfinal showdown.
"I see Barcelona as the favorites, but not too much the favorites, really," Dominguez said. "Perhaps, they are only favorites because of their international experience, but do not rule out Atletico. They compete very well.
"Atletico are having a great season. Simeone is a great coach and he is showing it. I wish I could have played in this Atletico team."
Dominguez was also critical of Borussia Dortmund and has claimed that failure to replace Mario Gotze and the injured Ilkay Gundogan has resulted in a disappointing season for Jurgen Klopp's team.
"They haven't managed to replace Mario Gotze or Ilkay Gundogan, who gave the game fluency," he said, before claiming that the Robert Lewandowski's suspension could cost BVB dearly against Real Madrid.
"The absence of Lewandowski in the first leg will also be noted by Real Madrid. With six or seven important players missing, the team has to notice that they are not the same."