The 25-year-old forward continued his excellent goal-scoring form against Borussia Dortmund, netting his for a third time in the Champions League this season on Wednesday night.
Gunners manager Wenger, who signed a new three-year deal in May, beat off competition from Liverpool to sign Sanchez in a £35m deal from Barcelona in the summer.
And former Chelsea striker Cascarino reckons the Chile international has helped to lift the performances of his Gunners team-mates.
“Arsene Wenger will look at him and he will think [Alexis] is one of his best signings,” Cascarino told Sky Sports News.
The former Blues man continued: “He seems to make them work harder as a team. It is infectious the way that he plays.
“What they did at Barcelona was closing down and harrowing people. Arsenal were working with that ethic during the game last night.”
Sanchez has scored eight goals and made two assists in 11 Premier League games.
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