The Gunners have won their first two Premier League games of the season and beat Leicester 2-0 at the King Power Stadium in the Carabao Cup third round on Wednesday night.
They also defeated Liverpool on penalties in the Community Shield last month in what has been a promising start to the season - and it has all been done without Ozil, whose struggles to win over Arteta continue.
The 31-year-old did not play at all for Arsenal following the 2019/20 season's restart in June and is yet to feature this campaign, meaning his last appearance for the club came on March 7.
Asked to explain the prolonged absence of Ozil - who is in the final year of his contract - from his team, Arteta said: "The team is evolving, you can see the level they are achieving.
"This is where we are at the moment. We want to evolve more and play better and compete better. We need to keep maintaining that.
"I'm really happy with the performance here, how difficult they're making things for the coaching staff to select the squad.
"We are picking the players that we believe are the best for each game. You can see we keep training, it's what we're trying to do.
"You can see that the players we are changing, we are using, it's very difficult every week - not [just] for Mesut - but for some other players as well to make the squad. Every week we try to pick the right players.
"Of course I understand and I respect your questions, but I have to try to do my job as fair as possible. I try to select the players that are, in my opinion, in better condition."
Analysis: Ozil situation suits nobody
Sky Sports' Nick Wright:
Mikel Arteta chooses his words carefully on the subject of Mesut Ozil but it does not take much detective work to figure out that the 31-year-old has fallen foul of his "non-negotiables".
The players in "better condition" are the ones given priority, he says. The implication is that Ozil is failing to meet his demands behind the scenes.
The prospect of a return to favour dwindles by the week. It would be more surprising at this point to see Ozil included in a matchday squad than not. It has been six months since his last competitive appearance for the club. The side is evolving, as Arteta puts it, and it is happening without him.
There are no winners from the present situation. Ozil's wages are an enormous drain on Arsenal's resources and his absence leaves the side without its greatest source of creativity. Ozil, meanwhile, is still being paid in full but is wasting what should be some of the best years of his career.
There is no imminent end to the saga in sight. Ozil has a year remaining on his contract and has demonstrated no desire to leave the club, while Arteta appears under no pressure to accommodate him in the side.
Given all the excitement that greeted Ozil's arrival at Arsenal from Real Madrid in 2013, it is sad that it has come to this. The situation suits neither the club nor the player. Something, at some point, will have to give.
Inside Arteta's Arsenal revolution
Arteta spoke exclusively to Sky Sports' Adam Bate about his first nine months in charge at Arsenal...
"It has been an incredible journey, that is for sure," Mikel Arteta tells Sky Sports.
The Arsenal manager is reflecting on his first nine months in charge. This is his very first job in management and it has coincided with a period that the club's chief executive Vinai Venkatesham recently described as the toughest nine months in Arsenal's 134-year history.
Arteta has not only altered the mood, best summed up by the joy that has greeted the news that captain Pierre-Emerick Aubameyang has signed a new three-year contract, but he has already brought silverware too - lifting the FA Cup and the Community Shield at Wembley.
"The fact that we were able to win two trophies is something incredible in such a short time. But what I am really pleased with is the people around me here and the support that I am finding, the energy that is created around the club now, how the fans are feeling about it all. That is what gives me the motivation to try to achieve things here. That is the challenge."
Summer transfer window - key dates and times
The summer transfer window closes at 11pm on Monday, October 5 with a feast of activity lined up on Footy Legend and across our social networks.
A domestic-only window for deals between the Premier League and EFL then runs from October 5 and closes on Friday, October 16 at 5pm.
Source: Sky Sports