The Premier League champions have been drawn alongside three other title holders in the shape of Real Madrid, Borussia Dortmund and Ajax in Group D this season after facing Bayern munich and Napoli last term.
But the Bosnia international is confident that Robert Mancini's side can progress to the knock-out rounds after being eliminated at the group phase last year.
He told SportSport: "We were in the group of death last season and now we are in it again."
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"The group will be great to watch, but not so great to play in. But we know what we are capable of and we don't fear anybody.
"I believe it will be a tight race and it will be interesting to see who will go to the next round.
The former Wolfsburg striker believes that Roberto Mancini's side could go on to win the competition if they qualify from the group, but admits Real Madrid are obvious favourites to go through.
He added: "Whoever finishes first and second in the group will be big favourites to win the competition. I hope we don't make the same mistakes as last season.
"Who are the favourites? Real Madrid, of course.
"I can't wait for the opening match at Santiago Bernabeu.
"That will be a great spectacle and I hope that we can show in Madrid what we are capable of and how strong we are."