The 25-year-old, who joined the Gunners from Real Madrid in a club-record deal on transfer deadline day, saw his tame first-half penalty saved against Marseille in the Champions League on Tuesday night, but then provided the perfect pass for Jack Wilshere to fire in a second goal which all but sealed a place in the knockout stages.
Ozil has returned a number of subdued displays since his high-profile move three months ago.
However, Mertesacker - who is now an integral part of the defence after initially struggling for consistency after he joined from Werder Bremen in August 2011 - believes the best is still to come from his fellow Germany international.
"Mesut has made good progress. He is in good form and you can see that," Mertesacker said.
"He was always a threat (against Marseille) and he never gave up after the penalty that he missed.
"We are very delighted with him, especially in the transition from defence to offence, when he is always a threat.
"He can play the balls, he is the one who always goes deep all of the time. He is in good form and I think we will see more."
Mertesacker added: "Sometimes he looks like his head is going down, but we said at half-time that we do not care (about the missed penalty). We just go on and that is what he did."
Ozil's arrival seemed to lift the whole club, with a renewed sense Arsene Wenger's current crop of talent can finally come of age in 2014.
The contribution of Ozil within the team, allowing the likes of Wilshere - who scored his first goal against Marseille inside the opening 30 seconds - and Aaron Ramsey more freedom, is not lost on Mertesacker.
"Mesut moves well between the lines, so it is always difficult to defend against him," the 6ft 6in defender said.
"When the centre-back comes out with him, there is always space for others to go in, so he helps us create more chances.
"We are playing well as a team and we should continue that in the Champions League and the Premier League."
Arsenal travel to Cardiff on Saturday aiming to consolidate their place at the top of the table.
Mertesacker said: "We are on a good run and we are in a good position. We want to keep that."
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