"They have some great players. In nine and 15, they are the best in the world in their positions.
"They have other good players around the park and others playing to the best of their ability.
"I think that is a reflection of the environment which has been created - the coaching and the leadership."
Cooper coached the Highlanders to victories in Sydney in 2004 and 2007 and said this weekend would be a tough test.
"It's always a hard one in Sydney. Tactically we have to expose them in certain situations.
"When they came over here earlier in the season, they were a good side when they played us. But they were not playing as well then as they are now.
"The positive we have is we are extremely good at reading the opposition. We will have the appropriate game plan to suit them.
"We won't change the core of our game plan but add subtleties.
"An example of that is the way the Chiefs picked a slow loose forward on their scrum last week and you get someone like Aaron Smith to expose that."
He said Saturday night's game would be tight and the momentum of the Waratahs had to be stopped.
"We have to get off the line quickly, win the gain line, win the collision, and they won't get momentum.
"We must stop the likes of Will Skelton from getting a roll on."
The Highlanders beat the Waratahs 26-19 earlier in the season at Forsyth Barr Stadium.
Cooper said his side's 29-28 win in 2004 featureda thrilling 21-point comeback.
The Highlanders were down to 14 men and had to watch as ace Waratahs kicker Matt Burke hit the post with a penalty in front before the final whistle.
In 2007, the Highlanders were in another tight contest in Sydney, clinging to victory 26-25.
