Ahead of the Test series starting Thursday, Ganguly, a long-time nemesis of the Australians and a former India captain, said Ricky Ponting's men remained formidable opponents.
"Hope no one is getting excited by what happened in Hyderabad," Ganguly told reporters in Chennai, where he was turning out for India 'A' against New Zealand 'A' to prepare for the four-Test series.
"Australia is a fantastic side, everyone knows that. They will be ready when the first ball is bowled in the first Test in Bangalore on Thursday.
"We will have to be at our best to beat them. They are the world's number one side, but I think India too will be equal to the challenge.
"It should be a very good contest."
The outspoken Ganguly rattled Australia, especially former captain Steve Waugh, when he led India to a thrilling 2-1 win at home in 2001 and earned a credible 1-1 draw Down Under two years later.
The left-hander, 36, was regarded by the Indian media as a controversial selection for the first two Tests of the upcoming series after being ignored for a domestic trial match last month.
But the experience of the 109-Test veteran with 6,888 runs forced the selectors to keep faith in Ganguly despite his lean trot with the bat during the recent 2-1 loss in Sri Lanka.
Ganguly, however, dismissed any talk of retirement and welcomed the pressure to perform in the series, for himself and the other seniors in the side like Rahul Dravid, Sachin Tendulkar and Venkatsai Laxman.
"When we play for India, there is always pressure," he said. "Nothing else matters. At the end of the day, all that counts are the number of runs on the board."
Australia, meanwhile, were counting their gains and losses in the tour opener in Hyderabad.
The tourists were embarrassed by India's second string over the four days, first allowing the hosts to pile up 455 in the first innings before being bowled out for 314 in reply.
The home team then smashed 292-4 in the second innings with Test discards Yuvraj Singh (113) and Wasim Jaffer (93) battering the tourists' bowlers on the final day.
Mike Hussey's century and Ponting's 41 and 58 not out were the only bright spots for the Australian batsmen, with none of the others crossing 50.
The tourists' biggest worry was their spin options after 36-year-old Bryce McGain returned home with a shoulder injury and rookie off-spinner Jason Krejza proved inadequate to the task.
Krejza, 25, went wicketless in the two innings at Hyderabad while conceding 199 runs, 63 of them in six overs on Sunday.
Australia, depleted by the retirements of Shane Warne and Stuart MacGill in quick succession, have called up one-day specialist Cameron White to replace McGain for the series.