Liverpool sit in second place in the Premier League heading into the fixture, whilst Watford under Javi Gracia have been impressive so far this term and lie in seventh.
The Reds boss insists that Watford are a "proper package" this year and they must be wary of the threat the home side possesses.
“[They play] really good football. Lively, well organised in a 4-4-2 mostly. Good game plan, playing football, preparing direction constantly,” he told reporters.
“With Deeney, who will be back—Mitrovic did really well in a similar job [for Fulham] and Troy is another step up—he’s really smart in that, hard, it will be interesting.
“Quick wingers, very good midfielders—Capoue, Doucoure—so analysing their game was really nice!
“I knew it before, I didn’t have time to watch all the games, but I saw the game against Tottenham. It was already good.
“So that’s a proper package, for sure the best Watford team since I’m in, [the right] combination with the manager. It’s an interesting project. It will be a proper challenge.”
The Reds begin a run of 11 games in 41 days starting Saturday, a tricky spell in the fixture list.
However, with no more international breaks until March, Klopp is relishing being able to have all his players together once more.
“It’s important the boys stay healthy; as many as possible stay fit. It’s the challenge we all face constantly,” he explained.
“The international break for a coach is crazy, in the middle of the season, nine days without your players.
“Robbo came back to train today for the first time after two very intense games for Scotland.
“We now have to make a kind of a new start, two days to put in again all you want to do in the next game.
“From now on we don’t train, we will recover and play, recover and play.
“We know about the difficulty of not only the next five weeks. Ten in the next five, and then it doesn’t get less [intense] how I know it.
“It’s no problem. The base is very good. A lot of yards to go, fights to fight, challenges to face. I’m looking forward to it.”