Ahead of match day three, the Scottish champions are bottom of Group A with no points, one behind the Danes who drew with Sparta Prague in their opening fixture.
Before his squad trained at Ibrox and a match Steven Gerrard conceded is a must-win for the home side, the visiting boss surveyed the task ahead.
"We have analysed Rangers a lot and watched many of their games," said Frederiksen, who will be turn to 38-year-old goalkeeper Tomas Mikkelsen with first choice Mads Hermansen out with a foot injury. "At the moment it is fair to say they are the best team in Scotland.
"They are number one in the league and they have long traditions in Europe and domestically.
"They have 55 domestic titles, Celtic is only 51, they have seven trebles so we know how big a club they are with proud traditions.
"When you come to the stadium you can feel the emotions and history and you know a lot about Rangers and the history of the club.
"It is a special match for us, against a really big club but I think we will be able to compete tomorrow.
"They attack very directly and like to get a lot of crosses into the box. They create a lot of chances and we have to make sure we control that.
"If you attack with a lot of players then you don't have so many in defence and we should see if we can take advantage of that."
With Lyon having won their first two group games against Rangers and Brondby, Frederiksen concedes the battle is on to be runners-up to the French side.
He said: "For the moment it looks like we are all playing for second place. We played against Lyon a few weeks ago and they were very strong.
"I think they will probably be number one in the group but the three other teams can compete.
Captain Andreas Maxso said: "If we can take point it will be good, we have a home game against them. We will go for three but one will be acceptable."