The two teams meet in the final of the Autumn Internationals at the weekend, where the All Blacks were surprisingly beaten last year in their only defeat since winning the 2011 World Cup.
"You've got to give New Zealand the respect they deserve as a team but you've also got to give your own team self-belief and the belief that they can win," Lancaster said in his press conference.
"The players are delighted to have got two from two [in the Autumn series]. That's nine out of our last 10 internationals we've won, so we've got an inner confidence building. But we recognise the challenge that's coming our way."