The Frenchman is preparing his side to face the reigning Champions League winner in a rematch of last season's round of 16 tie, from which Bayern progressed on the away goals rule.
Wenger is buoyed by his side's current form and confident the Gunners can spring an upset when they welcome Pep Guardiola's men to the Emirates Stadium on Wednesday.
"I think we are in a better mental shape than one year ago," Wenger said. "We'd lost to Blackburn in the FA Cup, which was a big disappointment.
"This time we won against Liverpool and we're determined to win the game (against Bayern). Since the start of the season we know we have to be 100 percent. We believe we can do it but it's down to the quality of our performance."
Arsenal won 2-0 at the Allianz Arena last season, having been beaten 3-1 at home, and subsequently went on a 10-match unbeaten run to secure fourth spot in the Premier League.
Wenger believes the victory in Germany proves Arsenal can compete with Bayern, but is keen to avoid a repeat of last year's poor first-leg display.
"It (beating Bayern) gave us belief to finish the season well," he added. "Since the start of the season we've done well, we're in a strong position. It's down to us how, from game to game, we can show the same spirit and focus we showed against Liverpool.
"It is of course important (not to concede at home). Every minute counts in a game of that stature. We are of course conscious of that, we will try to start very strong."