"It's an inspiring place and what they've done is remarkable. The way they did it and what they transmit is an amazing story," Arteta told reporters on Monday.
Arsenal moved two points clear of Liverpool on top of the standings following their 2-1 victory over Wolverhampton on Saturday, while Luton, who climbed their way up from non-league football to the Premier League in nine years, are 17th in their debut season in the top flight, two points above the drop zone.
"They deserve all the credit they're getting from last season and the close games they've had this season," Arteta said.
"(Tuesday) will be an intense and difficult match.
"(Rob Edwards) is a great coach and a really special person. You can tell that in the way his team plays. I think they're a really good team and that doesn't reflect in their results. It's inspiring to play them and we're ready to go."
Bukayo Saka, who scored against Wolves on Saturday, could make his 200th appearance for the club on Saturday.
"It's not bad, is it? It's gone really fast but it shows his consistency over the years. The impact he's had on the team has been really positive," Arteta said.
"It's like watching a kid be raised and as he's got older and more mature, he's kept the same level of humbleness.
"Bukayo is a special guy, we have him with us and we hope too for many years to come. He wants no limits and his teammates are getting to understand that now. There's room for him to keep growing."
Arteta said a decision will be made Tuesday on defender Takehiro Tomiyasu, who was taken off against Wolves "as a precaution."
"He's a strong boy, hopefully, he will be fine," Arteta said.
After Manchester City's 3-3 draw with Tottenham on Sunday ended on a controversial referee's decision, City manager Pep Guardiola told Sky Sports, "I will not do a Mikel Arteta comment."
Arteta had called a VAR check in Arsenal's 1-0 defeat at Newcastle on November 4th an "absolute disgrace" in a post-game rant.
Asked if he had cracked a smile when he heard Guardiola mention his name, Arteta gave a half-hearted smile and said: "Onto the next (question) please, thank you."
