Arsenal have won six of their nine matches since lockdown, including victories over Liverpool and Manchester City.
A superb brace from Pierre-Emerick Aubameyang against City on Saturday meant they booked a place in the FA Cup final on August 1 against Chelsea.
And Merson is convinced the Gunners are now on the right path, and has been pleased with their ability to grind out results, like Sheffield United.
He told Sky Sports: “Arsenal have a plan, they go and press when they have to, drop off when they don’t, they play with high energy and counter-attack as a team.
“They were outstanding against Man City. That was David Luiz – there’s no grey area – he’s either 9/10 or 4/10. But when he plays like that, he’s brilliant.
“Arteta has done an absolutely phenomenal job. It’s the first time I’ve watched Arsenal in many, many years, and they have a plan.
“Man City were up for it in the second half, and Arsenal put themselves on the line. I honestly think he’s done a brilliant job. I can’t talk highly enough of him.
“Against Liverpool, Arsenal rode their luck, but that’s Arsenal now. They can’t play against Liverpool and Man City as if they are the favourites, they have to grind it out like Sheffield United have to grind it out. That’s what Arsenal must do now.”