The 20-year-old, who was this week voted as SWPL player of the month for August/September, said the Gers have improved massively since the sides last met at the beginning of August.
Celtic ran out 3-1 winners at that last meeting at K-Park, but Hay says Rangers have to show confidence going into this game.
She said: “I think in the last Old Firm game we didn’t start off too well, but we started to gain some confidence in the second-half and we have obviously been playing our style of play for a wee whikle now.
“I think we have improved massively, we have had really tough games and we know we can now compete with tough teams.
“I think we have got it in us now and Greg is confident in us, so as long as we are confident in each other on the pitch I think we will do well.”
Hay returned to action last Sunday, playing half an hour against Hibs after a recent hamstring injury.
She added: “I think it was just an overload but I was pleased to come on in the game and I felt fine which was good so I am happy to be back playing.
There will be split loyalties in the Hay family on Sunday, as Brogan comes up against older sister Kodie.
She added: “She plays for Celtic so it is quite awkward at times but once you are on your pitch you forget about it, she is just another player on the pitch as harsh as it sounds to say it is the truth and I am sure she would say the same about me.
With two defeats to Celtic already this season, Hay says it would be massive for the Gers to get a result this weekend.
She explained: “I think its massive for us to go and try and get the result on Sunday. We really want to get the three points and just show how much we have come on since the last time we played them because I think we have made some really good improvements since then.”