Goals from Ragnar Sigurdsson and Kolbeinn Sigthorsson saw Iceland come from behind to dump England out of the competition and book their place in the quarter-finals of what is their first ever major tournament.
The result has gone down as one of the biggest shocks in European Championship history, but Arnason insists that he and his teammates always had faith that they could pull it off.
"We all believed. The rest of the world didn't but we did," he told reporters.
"This is without a doubt the biggest result in Icelandic football history. We've shocked the world."
Iceland, which has a population of just 329,000, will face hosts France in the quarter-finals.