Ally McCoist's side have been drawn at home to League One rivals Airdrieonians in the third round, scheduled to be played over the weekend of November 2/3.
After racking up eight wins in their opening eight games in the Scottish third tier, Novo is upbeat about the chances of his old club, who reached the last eight of the League Cup last season, beating Motherwell on the way, before losing to Inverness.
The 34-year-old, who left the club in 2010 after six years, said: "I think they have everything to get to the top and to win games.
"Obviously the team will want to do well and I remember being at the Motherwell game last year. At that point they were having a fantastic season but Rangers did very well to win the game and that showed what the side was capable of even then.
"Now they have the squad needed to compete and I don't see why you can't look at them getting to the quarter-finals or the semi-finals. You always need to think positively.
"I am the kind of person who thinks that way and when you are in a league or a cup, you always need to have the mentality where you look to win things. Rangers just need to have a go and have confidence that they can compete with anybody they face."
On his future playing career, Novo said he was still keen to find a club in Scotland, but admitted had given up hope of a return to Ibrox.
The forward is a free agent after leaving Huesca in his native Spain in the summer and said: "It would be nice to be here and it would be the easiest option for me. The reality is that I don't have anything. Maybe we will have to move abroad.
"Finding a team in Scotland is the easiest way for me because my family are
from here. When I came back, I was training at Rangers, just to keep myself fit. Then I got an invitation from Kilmarnock to go and train with them. The offers are more from abroad than over here.
"I just have to keep myself fit and not get depressed, although I actually feel depressed because I feel I can give a lot and I miss playing. I can definitely still do it. I'm quite positive about myself and I will always be honest. If I say I can play, I can play."
Draw in Full:
Forfar v East Fife
Culter v Berwick
Elgin v Dunfermline
Stranraer v Auchinleck
Alloa v Inverurie Loco Works
Ayr v Queen's Park or Preston Athletic
Rangers v Airdrieonians
Dumbarton v Cowdenbeath
Arbroath v Brechin
Stenhousemuir v Buckie Thistle or Annan
Edinburgh City or Fraserburgh v Montrose
Turiff v Stirling Albion or Whitehill Welfare
East Stirlingshire v Raith Rovers
Albion Rovers v Deveronvale or Linlithgow Rose
Clyde v Brora Rangers or Cove Rangers
Queen of the South v Hamilton
*None of the top-flight clubs are involved in the competition until November 30, when the fourth round ties take place.