The Sunderland midfielder was impressed to see the 18-year-old start against France and has described Sweden's meeting with England in Kiev on Friday as a "special game"
Larsson has tracked the progress of the 18-year-old, whom he played against for Sunderland in February at the Stadium of Light, and has been impressed with Oxlade-Chamberlain’s quick ascent to the national side.
Roy Hodgson’s decision to start the winger raised a few eyebrows but Larsson was left in no doubt as to the quality of the young playmaker.
"Of course he’s a terrific talent," Larsson told Arsenal's official website. "He’s done extremely well since he signed for Arsenal and in his first season there he’s impressed a lot of people.
"To go straight into the England team and play in the first game against France is obviously impressive.
"It says that he’s a guy with a lot of talent and that he can play football, so good on him."
England head into tonight’s game a point ahead of the Swedes, who lost their opening encounter with co-hosts Ukraine.
The match is even more significant for Larsson than most, with the winger having made more than 200 appearances in English football.
"It is a special game and a lot of Swedes feel it is a special game," Larsson explained.
"The Premier League is a league I follow closely and have grown up with, and England is one of the biggest countries in football."
Sweden will be looking to get their campaign back on track after their opening round defeat but face an uphill battle to emerge from Group D, with England and France the favourites to progress.
There will, however, be 18,000 supporters in the Olympic Stadium in Kiev backing Erik Hamren’s side.
"It’s amazing we have that sort of support," Larsson enthused. "We had it against Ukraine as well but on Friday we will feel it even more.
"England will always be England and it is always difficult to play them. They have a lot of excellent players and they have proved they are a stable team."