Petkovic believes Italy have one of the best squads to win the tournament as he singled Marco Verratti and Nicolo Barella out for massive praise.
After missing out on the 2018 World Cup finals in Russia, Italy seem to have built a formidable team under Roberto Mancini, having gone unbeaten since September 2018.
The Azzurri have also won their last eight games in a row with 25 goals scored and zero conceded.
Switzerland will be meeting Italy in their second game in Group D, four days after playing Wales in the Baku Olympic Stadium on June 12, but Petkovic is already wary of the Italians.
“They keep a good tempo and look after both attacking and defending. Mancini did a great job and he has a strong team with some fine individuals too,” the former Lazio coach told reporters.
“Verratti has evolved so much and plays at the highest level. Barella is also doing great things and is a very modern midfielder. I had thought Ciro Immobile would lose his form in the post-season, but he seems to have rediscovered his scoring instinct.
“There are many young talents with promise, but without the old guys back in defence, it’d be a very different Italy team.”
He added: “It’s a group with a lot of hidden dangers, because everyone in there thinks they can qualify. Italy are objectively out in front, especially with their recent results, but we can target second place and nothing is to be taken for granted.
“We must respect our opponents, but also remember to focus on ourselves and try to dominate any opponent.”
