Erik Hamren’s side take on the Three Lions in their second group game on Friday but first face the task of playing co-hosts Ukraine on Monday.
Larsson believes the avid following of English football in Sweden will make the Group D clash more significant but the 27-year-old is wary of the difficult challenge the game will pose.
"Games against England are always special for Swedes, because the people back home have followed English football forever," he said on the official Sunderland website.
"It's the main league people follow back home so the game will definitely be special.
"We know it will be very tough and England will go into the game as favourites, but we know we are capable of winning if we play well.
"Of course, we will have to perform at our absolute best in all three games to qualify."
The former Arsenal midfielder has identified the group opener against Ukraine as crucial to their hopes of advancing to the quarter-finals.
"Everyone will be desperate to get off to a good start and so will we," Larsson said.
"If we could get off to a winning start that will give us a good chance of progressing."