The Scream star, who began drinking alcohol again earlier this year (13) after two years of sobriety, rang in to speak to Stern and his sidekick Robin Quivers.
Arquette admitted he had been boozing before dialling, and left listeners concerned for his wellbeing when he began to talk about the Nazi leader.
He told Stern, "I'm wasted. This isn't the first time I called you (drunk). I've called in a few times."
He added, "This is the most controversial thing I'm going to say. It's very controversial, and I'm sorry, and I apologise to anyone I'm going to offend. And I'm wasted and I'll get sober tomorrow. Listen, listen, listen - I've gotta say something on the N-word later - but Hitler played the game very well. He did. Listen, yeah, he played his game very well. He convinced a lot of people to play his f**king evil game. He played the game really well, but he was playing the wrong game."
Arquette went on to gush about his ex-wife, Courteney Cox, saying, "She's the most brilliant, beautiful friend that I've ever met."