PHOTO: REUTERS
Wenger's side went into the international break in second place, two points behind leaders Manchester City after a 3-0 thrashing of Manchester United that sparked hope of a sustained challenge for the title.
It is 11 years since Arsenal were last crowned kings of English football, but Wenger made it clear he was more determined than ever to end that barren run.
And he hinted to shareholders at the club's annual meeting that should he achieve that then he might step down, having been in charge since 1996.
"We want more than third and winning the FA Cup, we have the potential to do more," Wenger said.
"I know you want to ask me -- will we win the championship this year? I think we are back in contention and we have a good chance.
"All of our numbers confirm that we have the potential to be in the fight. We are now equipped around the whole team to say we are really advanced in the way we work, prepare and develop players.
"I know I have faced some adversities, but I am more motivated than ever, more committed than ever.
"I am resolute to commit until the last day of my contract here to bring back big success to this club and leave this club in the position it can do even better when I leave."
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Key to Arsenal's chances of ending their title drought is the form of Alexis Sanchez, who has scored nine goals in his last five games.
Three of those were for Chile however and the long journey to and from South America has made him a doubt for the Watford game.
"We have to see if we have to protect him in our next game or not," Wenger said.
"I cannot do a lot about him playing. He came off against Manchester United with a hip problem, a problem with the rotator muscle and he wanted to go.
"He played in the last two games and we have to see how he comes back but it is always a tricky situation."
Arsenal defender Laurent Koscielny faces a fitness test, but midfielders Mikel Arteta and Matthieu Flamini are definitely available.
Watford, promoted from the Championship last term, have made a solid start to the season, thanks to a solid defensive foundation.
They have conceded just seven times in their eight games, but scored just six times themselves.
The Hornets have developed a habit of shedding managers even when they are winning and Quique Sanchez Flores, the former Real Madrid defender, is the latest to take the helm.
Unsurprisingly, he was not expecting to establish a Wenger-style dynasty at Vicarage Road, especially as managers in his native Spain didn't seem to last long either.
"We live in another philosophy, we think in another philosophy," he said.
"Sometimes in Spain we don't wait until the end of the season to change. In Spain it is difficult to ever think of a manager managing for 20 years.
"This is the first time I've faced Arsene Wenger. He has experience and we have respect.
"What Alex Ferguson and Arsene Wenger did is very difficult to match in other countries. It is impossible.
"In other countries it is completely different. Times changes but it is very difficult for other managers."
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