The 22-year-old moved to the Mestalla from Serie A side Sampdoria on a five-year deal on Wednesday, fresh from winning the World Cup with Germany.
Valencia could only muster an eighth-place finish in Spain's top flight last season, as Atletico Madrid broke the domestic dominance of Barcelona and local rivals Real to win the Liga title.
Despite the obvious strength in depth in Spain, centre-back Mustafi believes Valencia are capable of competing with the best.
"Despite all the big teams in La Liga, Valencia should not hide," he said at a news conference. "This is a great team, and the team is capable of beating any other side. We must fight and not hide."
Mustafi, who had spells in the youth teams of Hamburg and Everton before moving to Sampdoria in 2012, reportedly rejected offers to return to Germany and revealed there was only one option for him, particularly after speaking with Valencia head coach Nuno Espirito Santo.
"Nothing else ever came into the equation," he continued. "This is the next step for me and the reason I'm here is because everything felt right.
"I will try to contribute my strengths and qualities to help the team. Having played in three countries and seen three footballing cultures has added a lot to my game.
"For me it was very important to talk with the manager before signing my contract. He is a young manager and made a great impression on me.
"Seeing the interest of the club, I realised it was the team for which I had to play. Then there is the history of the club as well."
