A 3-2 win over Manchester United at the Emirates Stadium on Sunday cemented Arsenal's position at the top of the Premier League table.
The Gunners are five points ahead of champions Manchester City and also have a game in hand.
Arsenal have not won the Premier League since 2004 and have not played in the UEFA Champions League since the 2016/2017 season.
Fabregas, who currently plays for Serie B side Como in Italy, starred for Arsenal between 2003 and 2011 under Arsene Wenger.
Fabregas recently took in a trip to Arsenal's training grounds and has been impressed by all facets of the club under Arteta, who took charge in December 2019.
"I was lucky enough to be at the training ground recently and it felt like I had never been there before because everything had changed so much," he told Sky Sports.
"The manager of the training ground told me that 95 per cent of the changes were Mikel's.
"He's changed the perception of the club, a lot of positive messages around the training ground, much bigger facilities, better equipment, the pitches are better. Everything, you name it.
"In the entrance they have a symbol of the Premier League, an empty Premier League. Arteta wants to send the message that: 'guys, we need to put the work in'.
"It's a message and inspiration to the players for them to really want to put the Premier League in there. He's changed the mentality of the club since Arsene Wenger left. It's fantastic what he's done."
"Remember, they finished eighth for two consecutive seasons. To do what they're doing in a short space of time and doing it in the manner they're doing is quite inspiring," he added.
"Arsenal gave time to Mikel and this proves and shows to other clubs to not panic when things go wrong. Sometimes, finishing eighth and almost making it to the Champions League but just falling short, just having that process, and it is a process.
"The club understood that it took time to achieve it. I still believe they are way ahead of where they thought they'd be at this moment.
"Players like Saka and Nketiah, they came from the academy, they cost nothing to the club. And they've maintained that belief and the results are paying off."
