The Reds purchased Thiago from Bayern Munich for a deal worth £25million earlier this month and made his debut in Liverpool's 2-0 win against Chelsea at Stamford Bridge last weekend.
Arteta was speaking at his pre-match press conference as his side face two trips to Anfield with the first coming in the Premier League on Monday night.
Asked if Arsenal tried to sign Thiago, Arteta said: 'We don't discuss the things we try and do in the market, but I like him from my time in Barcelona.
'Incredible personality, great talent, very special, great qualities to play in midfield and yes, I think he is a great signing for Liverpool.'
Liverpool captain Jordan Henderson will miss Monday's visit of Arsenal as he has not fully recovered from the knock which forced him off at half-time of Sunday's win at Chelsea.
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