The Gunners, who won three Premier League titles under the Frenchman including an Invincibles honour, are bottom of the pack.
They have lost their first three games of the season, scored no goals and conceded nine, with five of them coming against champions Manchester City.
It comes after a summer of heavy spending, with Mikel Arteta splashing more than £100m on six new players as pressure has grown on the Spaniard.
But Wenger, who has been retired from management since 2018, believes all is not lost in North London.
Speaking to BILD Live [via football.London] , the former Gunners boss said: “Today the club is in good shape.
“They had two tough games [against Chelsea and Man City], the team has potential and I hope they can come back.”
The Gunners are looking to improve on last season’s performance, finishing eighth to miss out on European football for the first time in 26 years.
While they have spent £100m-plus on new players including Martin Odegaard.
Wenger’s absence is being felt, though, as fan and former England cricketer Mark Ramprakash said the club has suffered since his departure.
Speaking to Compare.Bet earlier this week, the 51-year-old said: “It’s interesting you say ‘Since Wenger left’ because there were so many people who were so determined to get rid of Arsene Wenger.
“I guess sometimes you have to be careful what you wish for and the club has never managed to stop that slide out of the top four.
With fans even cheering Man City’s goals in the 5-0 rout, Wenger believes the Gunners have ‘potential’
When you have success in sport, it’s a fragile thing. It’s so hard to create it, but sustaining it is so difficult. In football, with the amount of money flying around, it’s incredibly difficult.
“Wenger did it for so long and we had so many good times as Arsenal fans but now some reality is hitting a little bit and they’ve been struggling.
“I think Arsenal spent some money in the transfer window and we’ve yet to see the impact of that money spent.”