The German looks likely to make his Gunners debut on Saturday after moving to the Emirates Stadium for £42.5m from Real Madrid on transfer deadline day.
Cazorla received many plaudits for his debut season in the Premier League last term, and Carragher feels that the duo can be a force to be reckoned with for Arsenal.
"There has been a lot of talk over the summer that [the Premier League] hasn't attracted the top players. He is a top player," Carragher told Sky Sports News. "To get him is a big coupe for Arsenal."
"Whether they needed that type of player in that position more than others, would question. I think it will be interesting to see how he links up with Cazorla. It looks like Cazorla will play in a wider position.
"I liked [Cazorla] last season in that position behind the striker but you would imagine Ozil will play that position. So with them linking up I think it will be a joy to watch Arsenal. But will that take them to where they need to be in terms of challenging for the title? I still don't see that."
Arsenal travel to Sunderland on Saturday.