Hughton's men suffered a rude awakening in their Group H opener earlier this season, losing 3-1 at home to a ruthless Braga side.
However, a spirited 2-1 win away to NK Maribor last month kickstarted an upturn in fortunes for the npower Championship side, who have built on the result to make it three wins from their last three games in all competitions.
"The mood has certainly changed since the Maribor match," said Hughton.
"But I think that comes irrespective of whether it's in Europe or not, it comes from just winning football matches.
"When you're winning matches the club, and the training ground, is a better place to be and we're on a good run and, of course, it's one we'd like to continue.
"We want to build on the momentum we've got."
Brugge are unbeaten in the Belgian Jupiler League and shocked last season's finalists Braga in Portugal last month.
"We're expecting a stern test from Brugge," said Hughton.
"They had a very, very good victory against Braga, who were perhaps the favourites to win the group after reaching the final last season.
"That shows the quality they have. They're used to the European stage and domestically they are used to being at the top, winning football matches.
"This competition is new territory for us. It's a tough task here but one we're looking forward to.
"The most important thing is the Championship and the number one aim for the club is promotion. But this competition means a lot to us. We're grateful and delighted to be in it.
"The Championship is the most important thing but this is something we very much welcome."
Hughton's squad consists of youngsters, Championship stalwarts and experienced internationals such as Chile's Jean Beausejour and Spaniard Pablo Ibanez.
And the City boss is pleased with the balance that blend brings.
"We have some lads who have been involved before and some lads who are inexperienced," he said.
"We've got a nice mixture of experience and youth. We hope, whether they play, are on the bench or come off the bench to make an impact we can use all of their qualities.
"We've got the feeling that everyone has contributed on this run and it's a nice feeling.
"Taking any advantages you can from individual personalities is always very welcome."
City will be without captain Stephen Carr after he aggravated a recent knee problem against Leicester, so versatile midfielder Jonathan Spector is likely to deputise.
Hughton has several minor concerns but will wait until the last minute to decide his line-up.
Centre-back Curtis Davies (knee) has travelled with the squad but will not be risked, while midfielder Jordon Mutch (ankle) is continuing his recovery.
Experienced Brugge boss Adrie Koster, meanwhile, will be without captain Carl Hoefkens after the right-back suffered cruciate ligament damage.
Koster, whose side have six points from their two Group H games so far, said: "Birmingham are in the second league in England but that doesn't mean they're not a good team.
"They can play good football and are physically very strong. We have to avoid one-to-one battles and play our game because against Maribor they showed they're a good team.
"There will be a good atmosphere too because there are lots of fans coming from Birmingham."