United begin the defence of the trophy with a match against Villarreal at Old Trafford on Wednesday, while the Scottish Champions welcome Danish side Aalbrog to Celtic Park in the other Group E fixture that night.

Celtic lost 3-2 at Old Trafford in the group stages two seasons ago but beat United 1-0 at Parkhead thanks to a Shunsuke Nakamura free-kick.

Ferguson was mindful of that dramatic night in Glasgow, and Celtic's record of having lost only one out of their last nine group games at Parkhead.

"Celtic have a terrific chance - their home record over the last few years gives them a chance, there is no question about that," he said.

"They are probably in the top four or five clubs in Europe in terms of their home record.

"Anyone going to Celtic Park now is saying 'you've got to beat that atmosphere and the energy they spend in their games'. So there are a lot of plus points for them in that way."

Ferguson was back in Scotland to officially open a new youth centre for the Harmony Row Youth Club, the Govan team he started playing football with as a 10-year-old.

And while the nation continues to debates the merits or otherwise of Scotland's start to their World Cup qualification campaign, following a defeat in Macedonia and win over Iceland, Ferguson is upbeat about the future domestically and in the international arena.

"There's a general feeling, even down south, that Scotland are starting to do better in terms of young players," Ferguson added.

"Hibs have shown the way in bringing young players through and they have sold a few on to Celtic and Rangers. That is a judgement from the two biggest clubs in the country that they are doing things right.

"And there were more Scottish players playing in the Champions League last season than English players and that is a great credit to Celtic and Rangers."

He continued: "Looking at the Scotland side there are a half-a-dozen who you can say are more than decent players.

"You are getting to a standard where you are expecting them to win in Macedonia and places like that, which is good.

"I think when Alan Hutton comes back, he will make a massive difference to the Scottish team because he is, without doubt, as good a young full-back as there is in Britain.

"He has great attacking qualities. And you have Darren Fletcher and Barry Ferguson - so a lot of them are doing quite well."