"We are going into the game on Saturday, against one of the top teams, full of confidence, and we are in the best place we could be in," he told a news conference on Friday.
"We don't have a great record there and we would love to change that at the weekend. It will be tough but we are in a good place."
Stoke drew away at Manchester United in October, and Hughes backed his team to repeat the feat against second-placed Arsenal.
"We had a similar record at Old Trafford and we went there, played well and earned a point. Now its time we did something at Arsenal," he added.
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"Arsenal, as a team, look in good shape and whilst we have a lot of confidence, given their form too, it isn't a good time to play them.
"It's important for us to give ourselves an opportunity to get something out of the game, we need to stay in the match and frustrate them."
Stoke's situation is complicated by a host of injuries, with defenders Ryan Shawcross, Geoff Cameron and Phil Bardsley all ruled out of the game.
Goalkeeper Jack Butland will also not be risked as he recovers from a fractured ankle, with Lee Grant, who is on loan from Derby County, continuing to deputise.
"We would like Lee Grant to stay, he has done exceptionally well," Hughes said. "It isn't easy moving to a new club but he has been outstanding for us.
"We want to do a deal with Lee and as we speak we are talking to Derby. These things can take time though. It has to be the right deal."
(Reporting by Debanjan Bose in Bengaluru; editing by Amlan Chakraborty)
