Manchester City have won the Premier League in each of the last four seasons, with Pep Guardiola's side proving too strong for their opponents.
However, Scholes believes that a different team could be crowned champions this time around.
The new Premier League season starts on Friday night when Manchester United host Fulham.
Scholes, who won 11 league titles with United, is expecting a close-fought battle for glory this season.
Speaking on beIN SPORTS, Scholes said: 'I think the Premier League favourites will be the same as last year. I think City will be favourites, closely followed by Arsenal.
'I have said a few times that I expect Arsenal to be the team to win it this year. I think they've progressed over the last couple of years with Mikel Arteta especially. I just think this year is the time where they're ready to win it.
'It's never going to be easy, there's going to be a lot of competition. We know the top seven or eight teams in England are good teams but I think this year Arsenal will be the team to break the City cycle.'
Arsenal haven't won the league for 20 years but have come close to ending their lengthy title drought under Arteta.
In the 2022-23 campaign, for instance, they finished five points behind City, while last season they were just two points adrift of the champions.
Arsenal have brought in defender Riccardo Calafiori from Bologna as well as making David Raya's loan move from Brentford permanet.