The Chile international is believed to have turned down a move to Liverpool before opting to join the Gunners from Barcelona a fortnight ago.
Pires is confident that the 25-year-old will be a key player at the Emirates Stadium.
"His preference for Arsenal is a big gesture for the Arsenal family," the Daily Star quotes Pires as saying.
"I'm very happy because the Arsenal board have signed a world-class star. I am sure Alexis will help to win titles. He played pretty well in the World Cup.
"I like his offensive skills and I believe he will fit very well to the system that Arsene Wenger has in mind. I am sure Arsenal will win a title this season and hopefully it will be the Champions League."
Sanchez scored 19 goals in 44 appearances for Barcelona last season.