Merino scored again in a make-shift striker's role on Wednesday night.
Arteta said afterwards: "He was immense again. The way he scored, super smart. His timing, the way he wins the position and execution. But his overall performance, with the ball, without the ball, I remember an action that he passed the ball to Martin (Odegaard) in behind.
"Martin doesn't chase it, he makes 40 metres to chase it to the corner flag and goes back, wins the ball back. He is everywhere and his goal, with that really good momentum at the moment - he makes the team much better."
He also said of Merino: "It's curiosity and his will to learn and his will to help the team. He knew that we had a major problem from the beginning of the season. We lost Viktor (Gyokeres), Kai (Havertz) was out and Gabriel Jesus was out.
"So we needed a solution. He did it last year really, really well. I think this season he's probably taking it to another step because he's able to do even more things. So I think the team is really grateful and he's enjoying it."