You need the Arduino and Raspberry Pi to have a common ground whether at the common power supply or a wire.
Since the signal source is the RPi at 3.3V you don't strictly need a level shifter since the Arduino will read 3.3V as a logic high. It is good practice to use a series resistor (about 1000 Ohms) between Arudino and RPi GPIO pins to limit current. This protects the RPi in case the Arduino pin is accidentally configured as an output.