The Gunners came from a goal down to secure a win against Jurgen Klopp’s Reds.
Liverpool were in the ascendancy during the early stages of the game as Sadio Mane scored for the Visitors on the 20th minute mark.
The hosts responded through Alexandre Lacazette 12 minutes later before Arsenal academy graduate Reiss Nelson scored the match-winner on the cusp of halftime.
Arteta admitted he is happy with his team’s effort and insists the win will boost Arsenal’s confidence ahead of their FA Cup semi-final game against Manchester City on Saturday.
“In terms of energy and happiness before a semi-final, it was the best medicine,” the Spanish coach told reporters after the game.
“We had a bit of luck, but the belief was good. Before, going behind, I think we could have gone down, but we reacted.
"You only need to look at the difference between the two teams, the gap is enormous. But the energy, commitment and fight between the two teams is equal - and the rest will come. It will take time, but we can create something.”
"We need to build and improve the squad; it is not magic. You need a bigger squad to compete in this competition and that is going to be the challenge."