Arteta puts friendship with 'best in the world' Guardiola aside for title race
The two sides face off at the Etihad on Sunday with just one point separating third-placed City from leaders Arsenal.
Arteta served as Guardiola's assistant for three-and-a-half years at City before taking his first managerial job at the Emirates in 2019.
Under Arteta, Arsenal have risen back into contention for major honours, but have still not won the Premier League since 2004.
"It had to change," said Arteta at his pre-match press conference on how his relationship with Guardiola has evolved.
"My admiration and what I feel for him certainly hasn't. In my opinion he's the best coach in the world by a mile and he's one of the nicest people that I've met in football.
"Certainly he's one of the ones that I've had the most fun and laughter working with. That's going to stay there forever.
"At the moment the rules are what they are and you're going to have to adapt to it."
In contrast to Arsenal's lack of success over the past two decades, City are aiming to rewrite the record books once more under Guardiola by becoming the first side to ever win four consecutive English top-flight titles.
City have won the Premier League in five of the last six years and remain on course to repeat the treble they won last season.
"They have raised the bar in this league and football in general to levels that haven't been seen before," added Arteta.
"That's the beauty of this sport because it makes you better and challenges you more. You have to keep up with that pace and that's what we're trying to do.
"It's a massive game for both teams. It will give us a huge boost again if we go there and win it."
City will be without the key defensive duo of John Stones and Kyle Walker after they picked up injuries on international duty with England.
Arsenal's Bukayo Saka, Gabriel Martinelli and Gabriel Magalhaes all pulled out of their international call-ups but Arteta is hoping all three will be fit to feature on Sunday.
"There is a chance," said Arteta. "They haven't trained but tomorrow we have another session so there is a chance that they can be available."