The German manager is particularly wary of summer signings Danny Welbeck and Alexis Sanchez, but believes his team can get a positive result against the Gunners despite talisman Marco Reus missing the game through injury.
"This group is a good mixture of old and new faces. We certainly know Arsenal better than the other sides, after all, we play against them all the time!" Klopp told the Evening Standard.
"Facing the Gunners first off is a tough proposition, especially considering the injury problems we have at the moment and the fact we haven’t been able to train together very often. But we never complain and are looking forward to tackling the challenge tomorrow.
"They have signed two outstanding players in Danny Welbeck and Alexis Sanchez, who will give them even more pace. I’m expecting the Gunners to try and utilise this on Tuesday. But first and foremost, both teams will have to be fully focused and defend well."
Klopp led his side to the final of European football's top club competition in 2013, where they were beaten by Bundesliga rivals Bayern Munich. The BVB boss sees a pattern in which sides have advanced to the latter stages in recent years, and says he could see Arsenal emulating his 2013 team.
"Recent finals have always been contested by a top favourite and a dark horse like Atletico Madrid last season or us the year before. But I don’t like to think in terms of ‘favourites’.
"Of course, Chelsea, Real Madrid or PSG will always be mentioned. Maybe Arsenal as well, who knows? I certainly couldn't pick a favourite myself. At this level, every match is a real challenge."
This is the third time in four years that Arsenal and Dortmund have been drawn together in the group stages. Last season the German side topped the group, beating the Gunners 2-1 at the Emirates stadium but losing 1-0 at home.