The reigning champion and world number one backed up his claim - which will undoubtedly cause ripples among his rivals - by saying that only he and Higgins were capable of "finding an extra gear when needed".
"We are probably the only two players that have the ability to do that," said the 33-year-old O'Sullivan.
"If we find our form, then it will be between me and John."
The mercurial O'Sullivan opens his title defence at Sheffield's Crucible Theatre on Saturday week against Stuart Bingham, with world number five and twice winner Higgins up against Michael Holt.
O'Sullivan, who will be vying for a fourth Crucible crown, said: "The top players always find that little gear when needed. That is what separates you from being number one to possibly number eight in the world.
"I always believe that when my form's on, it just takes the opponent and the occasion to make you find that next gear.
"The two best players in the world and the two that are able to respond and raise the gear when needed are me and John Higgins.
"All the others are good, solid players but they are not used to raising that gear, or they can't."