The fourth-placed Saints are above Arsene Wenger's team on goal difference in the Premier League.
The teams meet at St Mary's Today, the 1st of January, 2015 and, when asked if Southampton could end the season higher than the Gunners, Koeman said: "I think so.
"I believe still that we can fight for a top place in the league."
Southampton enjoyed a strong first half to the season despite selling £97.6m worth of players, including Adam Lallana, Luke Shaw and Dejan Lovren, during the summer.
"We are now halfway through the season and we have played all the teams," Dutchman Koeman said.
"Maybe it was unrealistic before the season, and maybe that has changed a little bit with how we have played up until now."
Arsenal have not failed to qualify for the Champions League since Wenger took over as manager in 1996, but Koeman believes the Gunners' European commitments could count against them this season and hand his team an advantage.
Koeman, 51, said: "The Premier League really is a strong competition and they have to play Champions League again after February or March.
"That means a lot of games for them and it is a challenge to keep the physical freshness in the competition. Maybe we will come and surprise people." ...BBCSports
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