Arsene Wenger's side made it out of the group stages of the competition, yet face last season's finalists in a tricky tie and also trails Manchester United in the Premier League race by 15 points.
The 35-year-old thinks the German side - which leads the Bundesliga by nine points - should be considered the favorites to go through, but knows from past experience that Arsenal will provide a stern test.
"[The draw] is a top quality encounter footballers live for. However, it needs to be said that Arsenal aren't among the top clubs anymore. They have too many problems this season," he told TZ Online.
He added, "Bayern are favorites, clearly [the] favorites in this match. But they have to be careful: it's always difficult to win in England."
"Arsenal don't play typically British but rather a well-groomed combination football. But I actually think that Bayern can take advantage of this - they will be able to adapt better to that than against teams who park the bus. They will be interesting matches."
And while Jupp Heynckes can call on the likes of Bastien Schweinsteiger, Philipp Lahm and Thomas Muller to drive his team on to victory, Salihamidzic thinks a German player in Arsenal's side could decide the tie - Lukas Podolski.
"[Podolski] will be motivated - after all he will play against his colleagues from the [German] national team. For sure he will want top show that he has become an important player in England. Therefore, [Bayern] will have to watch out for him."
The midfielder also stated that the Bundesliga leaders are favorites alongside Spanish giants Barcelona to win the competition.
"FC Barcelona and Bayern are the teams who currently convince the most and have the best consistency in their performances," he stated.
"I think that Barca and Bayern are a bit above the rest at the moment."