Newcastle are on a fine three-match winning run, but Arsenal's 2-2 draw at CSKA Moscow – enough to reach the semi-finals – ended their own streak of six straight victories in all competitions.
Despite the Gunners looking set to miss out on Champions League qualification in the Premier League for the second successive season, Benitez still considers them to be among the division's elite.
"Arsenal are one of the top sides in English football," he told a pre-match news conference. "This is a massive team with very good players and a very good manager with great experience. That is why they have been in Europe for so many years.
"Last year and this year it's all about them not being in the Champions League, but they are in the semi-final of the Europa League – so that means something.
"If I say they are favourites, it's not, 'Rafa is playing games.' It is reality.
"At the same time, I have a lot of confidence in my team, my players and the atmosphere we can create in our stadium. I am confident we can beat them."
With Arsenal in action in Russia on Thursday, a gruelling schedule takes Wenger and his players to St James' Park less than 72 hours later.
But Benitez does not think it will be a problem for the visitors, adding: "Normally, if your team is travelling, you will say, 'We will be a little bit tired.' The other manager will say, 'No.' I have experience of both sides.
Rafa: “The reality is that @Arsenal is one of the top sides in English football. Very good players, very good manager with great experience. If I say they are favourites, I am not playing games. I have confidence that we can beat them.” #NUFC pic.twitter.com/Y9gUYU6xea— Newcastle United FC (@NUFC) April 13, 2018
"When you play Europa League or Champions League, you have to travel and have all these distractions but also you have a bigger squad. [Pierre-Emerick] Aubameyang was not travelling [to Russia] – he will be available. They are fine and they are used to doing that. I don't see a big issue.
"Some players may be tired, but when you are used to playing two games a week – especially at this level – I don't think it is a big advantage for us."