The Gunners dominated for much of the Premier League last term, only to slip at the business end of the campaign. Pep Guardiola's City then gathered momentum at the perfect time to snatch their third straight league title. They then went on to win their maiden Champions League crown in June to complete the treble.
Arsenal enjoyed an eight-point lead over City until mid-March but lost it at the end of April and will now look to seek revenge in Sunday's traditional curtain-raiser to the Premier League season at Wembley.
Arteta, 41, served as assistant to Pep Guardiola at City from 2016-2019 before taking the reins at the north London club and leading them to the FA Cup trophy in his first season in charge.
Since then, he has helped Arsenal qualify for the Champions League for the first time since the 2016-17 campaign. Arteta said he wants his team to build on the momentum from last season.
"Very excited to play a final to win a trophy, we are playing against the team to beat," Arteta said.
"This is what we want, fighting for every trophy. We have to prove that. What we did last year was not enough to win the big trophy, and we have to be better.
"We have to try and maintain the level and improve it for the fans."
Arsenal have added more depth to their squad with the addition of Declan Rice, Kai Havertz and Jurrien Timber in the close season.
However, there was one major concern ahead of the season curtain-raiser. Arteta hoped Gabriel Jesus will not miss much of the new season following the Arsenal forward's knee surgery.
The Brazil international went under the knife on Wednesday after experiencing irritation following a more serious operation to treat an injury suffered at the World Cup.
Jesus had spent three months on the sidelines recovering during last season as the Gunners fell short in their Premier League title charge.
Jesus will miss the start of the new campaign - including Sunday's Community Shield clash.
Speaking ahead of the game at Wembley, Arteta said when asked for an update: "He's fine.
"He's obviously disappointed because he was feeling good and then this issue came up that nobody expected.
"We had to do a little procedure there but unfortunately it was the best thing to do and the quicker the better. We made that decision. I'm sure he will be back soon and very fit."
Meanwhile, Guardiola revealed RB Leipzig defender Josko Gvardiol is set to sign for City imminently.
City will have six senior central defenders once the 21-year-old arrives, but Guardiola said that was not a problem given the demands of the season.
"The season is so long, there is many, many games. It is absolutely not too many," he said.
Guardiola was also asked about the futures of Kyle Walker and Bernardo Silva and made it clear he wants both to stay, especially after the departures of captain Ilkay Gundogan and winger Riyad Mahrez.
"Kyle and Bernardo, what can I say? They are so important for us," said Guardiola.
"We lost two incredible players for us, Gundogan and Riyad was massively important in the last two seasons, goals, assists and personality on the big occasions and important games.
"To lose Kyle and Bernardo would be so difficult. That's why we are going to do everything to keep them."