The Gunners have been paired with the Bundesliga leaders in the draw for the last 16, with the first leg in London on February 19 and the return at the Allianz Arena in March.
Podolski, who spent three seasons at Bayern from 2006, believes Arsenal have what it takes to get past one of the tournament favourites.
"They played in the final in 2010 and last year. It is a big club, but we have the chance to win against Bayern Munich," Podolski told Arsenal Player.
"They have (Mario) Gomez up front, they have (Franck) Ribery, (Bastian) Schweinsteiger, Philipp Lahm, Manuel Neuer.
"But there are two matches, one at home (and) one away, so both teams have the chance to win."
Despite inconsistencies on the domestic front, Arsenal have reached the knockout stages of the Champions League for the 13th consecutive season - a record bettered only by Real Madrid.
Wenger feels the competition is getting stronger every season.
Speaking this morning at a press conference before the draw was made, Wenger said: "You have only five teams from last year that are in the last 16 [again]. That means 11 newcomers are in the last 16, which shows you how quickly it changes and how difficult it is to be in there.
"The German clubs, for example, have made a big, big leap forward. The Spanish clubs are traditionally there and in England we have a little deficit because usually at that level we have four. We are only two this season.
"You have the French, Paris St Germain, coming in, traditionally Porto are always in there but especially I believe the Germans have improved."
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