Arteta, 31, left Goodison Park on transfer deadline day in August 2011 following six seasons on Merseyside, where he had become a key player.
The Spaniard is glad to see the Toffees have not come unstuck since Roberto Martinez took over from David Moyes, whom he beat with an impressive 1-0 away win at Manchester United on Wednesday night.
Everton are in fifth, behind Liverpool on goal difference, and trail leaders Arsenal by seven points after the Gunners' midweek win over Hull.
And Arteta knows his old side will provide a stern test of just how far Arsene Wenger's men can go in 2014.
"Everton are having a great season and they have got great results against top teams, which is not easy," noted Arteta.
"It was a big result (at Manchester United), it was massively important for them and will boost their confidence, so we are going to face a really difficult team for sure."
Arteta added: "I know the fundamentals of the club and I was happy with the way they dealt with the transfer window.
"I think they did really well and improved the team compared to where they were before. They deserve to be (up) there."
Arteta believes the competition for places in Arsene Wenger's side has helped Arsenal get off to such a good start in the Premier League.
"We have struggled in the last years a little bit to do that because of the numbers and injuries and now we have almost everyone fit, apart from Lukas Podolski and Alex (Oxlade-Chamberlain), that is a very good sign," added Arteta.
"I think it (competition for places) is great. Everybody has to be on their toes and everybody is important.
"We are going to need everybody if we are going to achieve something. I think it's a good thing."
Arteta believes the lack of experience of winning trophies in the current Arsenal squad will not damage their chances of finally ending their trophy drought which stretches back to 2005.
"Does it matter we don't have the experience of winning the title before? No - as long as you have the quality, the ambition and togetherness that we have, I think we are in a good position to do it," concluded Arteta.