Mistakes from Liverpool goalkeeper Alisson gifted second-half goals to Gabriel Martinelli and substitute Leandro Trossard at the Emirates, after Gabriel's own goal had cancelled out Bukayo Saka's opener.
The win moved to within two points of the league leaders, who were beaten for only the second time this season, and potentially set up a three-way title race with Manchester City.
"It was an extraordinary game," Arteta said. "An incredible performance from the players and our people. That’s the best atmosphere I’ve seen all season.
"We demanded that. We had to go to a different level and connect it again to the demands that this league has. I think the players left absolutely everything.
"They put their heart and soul in every single ball. I cannot be any prouder because I know how hard it is to beat this team, how much you have to suffer and how much you have to process to do what we did on the ball. So big thankyou."
Arsenal were good value for their 1-0 lead going into first-half stoppage-time but Gabriel slapped a Luiz Diaz cross into his own net to literally hand Liverpool an equaliser, despite the visitors failing to have a shot on target in the opening 45 minutes.
"We conceded a really poor goal and that really affected us," Arteta added. "The dressing room was really touched at half time. I could sense it.
"But you cannot feel sorry for yourself against this team because they’re going to punish you. We reacted really well after 10 or 15 minutes of suffering. We recovered control and we gave ourselves the big chance to win the game."
Arsenal lost three games on the bounce at the turn of the year, including to Liverpool in the FA Cup, but they have responded with three consecutive victories, with Arteta saying his side have their "momentum back".
The whole season is now ahead of us. We need players back because we have a few injuries.
Asked if his side are back in the title race, Arteta said: "We are there, that’s for sure. We want to continue to be there. We’ve been really consistent all season, if not you aren’t where we are today. We take it game by game, the availability of the squad is going to be crucial. We have learned that from last season. Let’s try to make that happen.
"The schedule that we had prior to Christmas, the amount of players that played so many minutes and the injuries that we had, we needed to recharge.
"Now we’ve got some momentum back. Three really convincing wins in a row, the team playing really well and we have to go for it. The whole season is now ahead of us. We need players back because we have a few injuries.
"That’s the big concern I have. If we have everybody fit, training and available then we have a good chance."
Jorginho made his first start since the cup defeat to Liverpool on January 7 and Arteta picked out the midfielder as man of the match and a role model for the squad's younger players, revealing the Italian is playing through the pain due to a niggling injury.
"It’s a game that I had in my mind, that I was imagining how much we were going to need him," Arteta said.
"They’re a team that don’t really allow you to put the fifth player in the frontline, the way they play. He’s a really intelligent player, his biggest quality is that he makes the people around him better. He connects everybody. I think he was man of the match.
"[He's] unbelievable. I always say that he’s an example, a role model. He’s been in a lot of pain because he’s had an issue he’s been carrying for months. He didn’t want to stop, he’s been playing with that. He’s been training, always the first one in and the last one out.
"For all the kids at the club, if you want to look at somebody, just look at him.
"He’s won everything but you ask him not to play or play one minute last week he’s happy to go there. Ask him to play 90 minutes at that rhythm and he’s able to do that. I’m really lucky to have players like this."