The Blues have made a good start in the Premier League, winning their opening two games - including one against Manchester United - before falling to their first defeat against West Bromwich Albion last weekend.
"When you see new players coming in you know everything is moving in the right direction and that is what every single player wants," said Distin.
"It's a bit early to say this is the best squad during my time here.
"We need a bit of time for players to adapt and see how well they are going to do but I rarely remember the squad having so much quality. We have enough quality to compete for something interesting this season."
Everton currently sit sixth in the league and will face Newcastle United after the international break.