But he's eyeing a far bigger prize when the two fierce rivals go head to head in the blockbuster championship decider at AAMI Park on Sunday.
Muscat was awarded the gong on Monday night after guiding Victory to its first Premiers' Plate in six years in his first full season as head coach.
The 41-year-old, who took the Victory helm three rounds into the 2013-2014 campaign when Ange Postecoglou assumed the Australia coaching role, says he's honoured to be awarded Coach of the Year but is more interested in claiming silverware this weekend.
"The individual awards are not what you set out to achieve," Muscat said.
"There's something much greater on offer next week.
"But this is a reflection of all the hard work, not just from the coaching staff but also the playing group because they've had to buy into and believe in what we've wanted to achieve."
Arnold may be more experienced as a coach, having guided the Central Coast Mariners to a maiden championship in 2013 when Muscat was still playing.
But while Muscat admits he's still learning, he's no stranger to grand finals having won two as a Victory defender.
Not much splits this season's top two sides who have drawn in all three encounters this campaign.
Sydney overcame Adelaide United at Allianz Stadium on Saturday to book a place in the decider, but Muscat feels coping with the hype surrounding Victory's Melbourne derby semi-final win will give his side the edge.
"I honestly think that last week's build-up will hold us in good stead because if you were down in Melbourne it was a huge build-up, It was almost like a grand final," he said.
"So that experience and putting a performance on like we did will hold us in good stead.
"I've heard everyone say it's important to enjoy this week but as far as I'm concerned I want to enjoy next week.
"So we'll work pretty hard this week as we've done the whole way through to get things right and give the players the best opportunity to perform."
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