Ireland, despite leading for most of the first Test, eventually succumbed to a 23-34 loss at Hamilton's Waikato Stadium to a rusty All Blacks outfit last Saturday.
However, Henry says the extra week of preparation before the second Test has given his side time to find its feet and work on combinations that were lacking in the first game.
Asked whether he considered the series against Ireland as merely a training run ahead of the upcoming Tri-Nations series, Henry was adamant that such a view couldn't be further from the truth.
"We have got total respect for the Irish," he said.
"I've said at every press conference this year that I think they are probably the best team in Europe.
"Their results show that over the last 12 months and we respect them."
All Blacks skipper Richie McCaw agreed with Henry regarding the skill of the Irish and says he expects the visitors to come out even stronger in the second clash.
"I think they were quite disappointed that they played pretty well for a fair part of the game and let it slip near the end," said McCaw.
"I think through the media they have expressed that this week.
"I guess they will be looking to put together a full performance."
McCaw also admitted that the first Test, despite securing the win, was notable for a less than satisfactory performance by the All Blacks.
"From our point of view, we were probably a little bit disappointed that it took most of the game to get ourselves really into the swing of things," he said.
"The Irish obviously felt last week that they had a glimmer of hope to win the game and I'm sure they will have that in the back of their minds and don't see why they can't come out and give it another crack.
"It's going to be another battle I'm certain of that."