The midfielder is optimistic about the Nationalelf's chances of claiming their first major trophy since 1996 this summer
Joachim Low's men were eliminated in the semi-finals in South Africa four years ago, but the Borussia Dortmund midfielder feels they could go one step further if everything goes their way in Brazil.
"I believe that the team has a lot of potential and is capable of going very far in Brazil," Gundogan told Goal.
"A lot of people have [relatively] low expectations, but that could prove to be a good thing.
"With a good start and a good result against Portugal, Germany could be on its way to the final. They will have to grow a bit game after game. And anything's possible if you make it to the final."
The 23-year-old will miss the tournament due to a back injury that kept him sidelined all season and he has admitted that not playing at this summer's World Cup is a huge disappointment.
"Of course, it hurts a lot to miss the World Cup," Gundogan confessed. "Especially because it is in Brazil. I also felt confident about my chances of getting playing time.
"I will obviously follow the tournament closely, though, and hope Germany will do well."