Wenger recently admitted releasing Larsson and St Andrew's team-mate Fabrice Muamba was a difficult decision that could come back to haunt him.
And ahead of this weekend's meeting, Larsson told the Sunday Mercury: "It's obviously very nice to hear Arsene Wenger say something like that.
"I had a chat with the boss, Wenger, when I first went out on loan and he said something similar to me then.
"He told me that I was not exactly there at that moment but he believed that I could be in the future.
"It's nice if he thinks that you've got talent and you can progress and become a good player because he's got an eye for talent, that's for sure.
"But now I'm here and playing for Birmingham I'll be doing my best to go back to haunt him.
"Hopefully I can have a happy handshake from him after we've got something from the game."
Larsson admitted his dealings with Wenger were few and far between during his five years coming through the ranks at Arsenal.
But the Swedish international revealed that the Gunners boss took a close personal interest in the private lives of all of the players.
"The one thing you got to learn, the longer you were there, was that he knows about everyone in the club.
"Even if you didn't talk to him or see him that often, he still found out how you were doing.
"He doesn't talk if he doesn't have something to say, but when he talks you listen because he's a great manager. I think he knows a lot about the players - maybe not if you've fallen out with your girlfriend or things like that - but he's that type of guy.
"The most important thing for him is what you do on the pitch. But it's also important to him how you live your life and how you behave to give yourself the best chance of being the best you can."