Defoe joined Spurs for the first time in 2004, but left for Portsmouth in January 2008 before returning to north London a year later.
Collectively, the England striker has spent eight years of his career at the club, but with the likes of Gareth Bale, Moussa Dembele and Jan Vertonghen in the current team, he believes it is the best Spurs side he has been a part of.
He told reporters: "I think it probably is the best squad since I have been here. As a player I have always said when you are playing with good players it makes it easier. Especially as a forward, you know you are going to get chances in a game to score.
"There are players that could walk into other top teams in the Premier League, but it is great for everyone and keeps you on your toes because you know if you get an opportunity you have to take it. We have that winning mentality in training - it is just a good time to be here.
"There are players that can come into the team and do well so there is that competition which is always healthy. It is a great time to be at the club, we are playing with great players and the sky is the limit."
Defoe enjoyed a impressive first half to the current campaign, but the forward has been troubled by injuries so far in 2013. However, he says he is feeling fine once again.
He continued: "I feel good and have trained for a full week with no problems, so I'm ready to go. I was having a joke with Scott Parker yesterday and we were saying sometimes that if you have got a little knock you just need to stay on it and make sure you're fit and ready because if you are out of the squad someone will come in and they will do well, because it is such a good team to play in.
"I have been here for many years now and in my opinion, in terms of team spirit it is the best it has ever been.
"Everyone is buzzing around the training ground and putting the work in. Even the players that are injured are working hard to get back.
"It is the winning mentality that I think we have got now. In games when things aren't going great everyone gets stuck in and just keeps going, it is a good thing to have. It is important to have that I think."Up next for Spurs is a Europa League tie against Inter, a fixture that brings back memories of Bale's scintillating display against the Italians in the Champions League in 2010, and Defoe is not surprised that the Wales international is showing that form week-in week-out this season.
He said: "I don't think he [Bale] has surprised me to be honest, he is a great player and what he has done over the past couple of months has been unbelievable.
"Even when he was at Southampton I always thought back then that he was special and it was always a matter of time until he cold make that step up into the Premier League and do the same.
"He has realized that he is a good finisher - in fact he is a great finisher with a great left foot. When things aren't going well in a game he can just take the ball, beat two players and score. I think he has got 16 league goals, that is amazing."