Celtic kick off their Group H offensive against AC Milan in the San Siro on Wednesday with the knowledge that they can upset the odds, given they qualified for the last 16 ahead of Spartak Moscow and Benfica with the help of a famous home win over Barcelona.
They have since lost the spine of their outfield team but Lustig feels they have a stronger squad as well as being more experienced.
When asked what Celtic had learnt from the previous campaign, Lustig said. "That everything is possible. Last year when we looked at the group, no-one believed in us.
"We knew it was going to be really tough but there was only one game we didn't feel we played really well, Benfica away, but still we were really close to getting a point.
"We won at Spartak and we were really close to taking points at the Nou Camp as well so of course our confidence is maybe better than it was last year.
"It's going to be really hard but we have faith."
Most observers would agree Celtic have an even harder task this season in a section that has been dubbed the "group of champions".
Barcelona, Milan and Ajax have been European champions 15 times between them with Celtic the first British team to lift the trophy in 1967.
But Lustig fears no-one.
"Last year was unbelievable," he said. "We did really well in the group and hopefully we can do it this year as well.
"It will be really fun. Of course we are underdogs like last year but there are going to be some massive games.
"Especially when we are playing at Celtic Park, we know we can beat any team.
"Last year was the same. We are not going to be happy to play some decent football but go back to Glasgow with zero points."
However, Lustig is relishing the chance to play the underdog role given Celtic are expected to win every game they play in domestic competition.
"The pressure is on Milan," he said. "If they don't manage to take three points they are going to look on it as a massive failure. But we have everything to win and it's quite nice to have it that way."
Celtic's Champions League displays last season may have given Lustig and his team-mates confidence but they also alerted other clubs to thier individual talents.
Celtic have lost central players Kelvin Wilson, Victor Wanyama and Gary Hooper but, despite losing summer signing Steven Mouyokolo to an Achilles injury, Lustig feels there is more strength in depth this season.
Dutch pair Virgil van Dijk and Derk Boerrigter look like they are settling in while Finland striker Teemu Pukki scored on his debut in the 3-1 Scottish Premiership win over Hearts on Saturday.
Manager Neil Lennon has also added Israel midfielder Nir Biton and Portuguese forward Amido Balde and Lustig is encouraged by the reshuffle.
"We lost three good players but I think we have a better squad this season overall," the 26-year-old said.
"We have lost big players like Hoops, Victor and Kelvin were really good for us last season.
"But I think the whole squad is stronger. We are a really young squad as well and everyone is one year older as well."
The San Siro assignment will reunite Lustig with Mario Balotelli, and he admits it will be a major challenge to halt the Italy striker's progress.
"I faced him once and he scored in that game so I don't know (how to stop him)," he said.
"It was an under-21 game, we lost 2-1 I think. He had everything, a real big talent. He's a top, top player.
"We managed to stop some good players last year so hopefully we can do it again.
"He is a real good player but we have to focus on our own game as well."