The experienced forward says that his side's performance in the 2010 World Cup was a catalyst for improvement and it is now confident it can take on the best in Brazil.
The 35-year-old won the Golden Ball as the tournament's best player in South Africa in 2010 as his side went on to finish fourth, before he enjoyed success at the Copa America just a year later.
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Despite a formidable group including Italy and England in 2014, Forlan believes la Celeste have regained a sense of pride in their play not seen since their title-winning campaigns more than 60 years ago and is confident they can challenge the best in Brazil.
"We have an aura," the former Inter, Atletico Madrid and Manchester United forward told Goal. "Uruguay historically has won many titles [winning the World Cup in 1930 and 1950] but in recent decades lost that aura. After how the World Cup in South Africa turned out, we gained belief in the team and reaffirmed the following year with the Copa America title. In South Africa we had a tough group. We were with the hosts, as well as France and Mexico, two very strong teams. This group is also strong, but we are in a World Cup and we have to play against the best.
"Playing a World Cup is spectacular. You remember when you were little. When you sing the anthem, when you see people in the stands or your friends at home getting ready to watch the game, it's something unique."
"Luis Suarez is much better," he said alluding to the attacker's recent knee injury. "He is taking steps to recover well and hopefully he recovers well and will be ready to play. Suarez is very happy at Liverpool. All you hear are rumors for now. If at any time he signs for Real Madrid, I will talk about it then."
He also commented on his experiences in Japan, having arrived in the J-League in January, where he has already scored seven times in 15 games.
"The Japanese league is very good," he said. "Technically they play very well and are very fast."