The five-time Olympic medal winner said that Jodie Henry and Libby Lenton will need to swim record splits to even have a chance of winning gold in Melbourne in March.
The United States are looking for revenge after losing the title and record they set at the Sydney Olympics to Australia during the Athens Olympics in 2004.
"I think it is going to take a world record to win," said Coughlin, who has just finishe two weeks' training in Sydney.
Phelps breaks own record
18/02/2007 AT 06:52
"Our relays are the best they have ever been. It's going to be a very close race. Who knows, we may even see three teams break the world record."
Germany have also entered into contention after their relay team - of Britta Steffen, Annika Leibs, Petra Dallman and Daniela Goetz - smashed the world record mark of 3:35.94 set by Lenton, Henry, Alice Mills and Petria Thomas in Athens.
"It's exciting because it pushes me to be better," Coughlin said of the new competition.
"Every relay I go faster than in my individual events. I guess being on a team lifts me."
The 24-year-old Coughlin won four medals - including gold in the 100m freestyle - on her debut in the 2001 World Championships before going on to win Olympic gold in the 100m backstroke and 4x200m freestyle relay, silver in the 4x100m freestyle relay and 4x100m medley and a bronze in the 100m freestyle at Athens 2004.
In Melbourne, Coughlin will compete in seven events - the 100m butterfly, 100m backstroke and the 50m and 100m freestyle as well as three relays.
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