The German coach is confident ahead of Tuesday's game but Michael Zorc is wary of the in-form Gunners, particularly summer signing Mesut Ozil
The Bundesliga club head to London three points behind the Gunners having lost 2-1 to Napoli in their opening group game before beating Marseille 3-0.
Dortmund warmed up for Tuesday’s clash with a 1-0 league win over Hannover, thanks to a fourth-minute penalty from Marco Reus.
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"We should be one step further on Tuesday,” he told reporters. “We can play better, and we will. I have a good feeling."
Sporting director Michael Zorc, meanwhile, is wary of facing an in-form Arsenal side who have won both opening group games and have won six and drawn just once in the league since losing on the opening day.
"The match is completely open. Arsenal are in top shape and are leading the table in the Premier League,” he said.
“In the Champions League you don't get 10 chances to score. If you have one, you should capitalise on that."
Zorc also warned his side they must be wary of Mesut Ozil, who was in fine form against Norwich on Saturday, scoring twice in a 4-1 victory.
"It looks like he [Ozil] is precisely the player they were lacking before,” he added. “They have assembled a top team again."