The Catalan giants were held to a 1-1 draw by La Liga title rivals Atleti in the first leg of their quarter-final tie at Camp Nou last week, so it is all to play for when they lock horns at Vicente Calderon on Wednesday.
Larsson, who won the competition during his time at Barca in 2006, has seen enough of his old club this season to form the opinion that they can become European champions once again despite the absence of injured goalkeeper Victor Valdes.
He told Perform: "The current team is very good, they were a little bit unlucky to get Victor Valdes injured and out for the rest of the season because I rate him as a very solid goalkeeper.
"You don't get to see that very often because more often than not Barcelona is having the ball so you don't appreciate how good he is until you train with him week in and week out for a long time, because then you know he is a very good goalkeeper.
"The team has everything really to go very far and maybe even win the Champions League but when you come to this late stage in the Champions League, you can have as much quality as you want but you need that little bit of luck as well in order to get the trophy."
Atleti have been transformed into La Liga title contenders as well as a force in Europe under Diego Simeone and Larsson sees similar traits in his side to those possessed by the former Argentina midfielder in his playing days.
He said: "Yes I have been impressed because even though they don't have the same amount of money as the other teams in Spain, Simeone has shown with a lot of good organisation you can achieve very good things.
"I think the player that I remember him as was a fighter and he never gave in and gave everything for his team.
"He liked to fight for every inch on the pitch and he is just telling the players how he wants it and if you look at the team there is a lot of quality technically...and they are so well organised, that is something he has been talking a lot with his players about."
