Mercedes hope to be in 'sweet spot' for opening race after mixed qualifying
After fighting tricky cars for the past two years, the Briton said it was nice to have one he could fight rivals with instead and that "just really ignites the fire and the flame within us drivers".
Teammate George Russell qualified third on the grid, 0.306 seconds slower than Red Bull's polesitter and triple world champion Max Verstappen.
"The car is really fantastic, it is a real big improvement from the previous years. A lot more stable, a lot more fun to drive but we still have work to do as you can see," said Hamilton.
"But for George to be three tenths off Max, it’s incredible," he added.
"I think George’s position is a testament to the job everyone has done at the factory and finally giving us a car that we can fight with."
Hamilton and Russell were one-two in practice on Thursday using the same set-ups but went in different directions for qualifying.
"You could say the one I was on was not good on a single lap. I hope that it’s good in the race," said Hamilton, who explained that he had "put something on the car that we haven’t put on for the last two years".
Russell said both drivers felt much happier with the car, even if there was still a lot of catching up to do with Verstappen.
"We have obviously made a big step forward in one lap pace and we hope we haven't compromised the race pace.
"I think it will be a close fight between everybody apart from Max," said the younger Briton.
Team boss Toto Wolff told Sky Sports television that Mercedes thought they had more pace but the set-up prioritised race pace over single-lap performance.
"Yesterday it looked better but we put the car in a sweet spot for tomorrow's race, at least this is what we hope," said the Austrian.
"I think the set-up changes that we made, they contributed to less performance today.
"At the beginning of the qualifying, we thought 'Oh, maybe we've taken too much performance off, sacrificed for tomorrow's race' but then at the end, we got it quite OK with George.
"Tomorrow should be better, but we are still learning about this car."