Dani Ceballos said "there was never any doubt" he wanted to return to Arsenal following a conversation with Mikel Arteta ahead of the FA Cup final.
Ceballos will spend a second successive campaign with the Gunners after Real Madrid sanctioned another season-long loan deal in north London.
And the midfielder has explained why he turned down the chance to stay in Madrid, also rebuffing interest from Real Betis.
“I’m very pleased to be back with Arsenal – I’m very happy to have come back to a club where I feel important,” Ceballos told Arsenal's official website.
“It’s true that I had other options, such as staying at Real Madrid and going back to the Spanish league, where there were teams interested in me."
The 24-year-old revealed that he made his intentions clear to Gunners boss Arteta before last month's FA Cup final triumph over Chelsea.
With Arsenal having lifted the Charity Shield as well as the FA Cup under Artete, Ceballos believes the manager is the right man to lead the club to more silverware and back into the Champions League.
“I spoke to the coach before the final, and told him that I wanted to stay at Arsenal and win titles," he said.
"I’d been really happy with what Mikel had built at the club since he came in. I had a great time at this club last season and there was never any doubt in my mind that I wanted to come back.
“I think everybody can see what Arteta is doing at the club. He’s only been here for eight months.
"There were three competitions we could fight for. We got knocked out of the Europa League, unfairly in my view, but then we won the FA Cup and the Community Shield, which were well-deserved titles.
“More than that, though, it’s about what he’s created here – there’s real positive energy in the dressing room, the players are happy and everyone is doing their bit.
"We’re bringing through young players, which I think is really important for this club, because it’s something that’s always been done here.
“Mikel is the right person to get this club back to where it deserves to be, which I believe is in the Champions League, competing against the best teams in Europe.”
Ceballos also explained how Arteta, his teammates and Arsenal's fans all made him feel wanted at the Emirates.
“I think everyone will have seen last season that from the moment I joined, I bought into the club completely and always gave 100 per cent both on and off the pitch,” he said.
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“The fans repaid me for that by showing me a lot of love… when I was at home they were sending me messages asking me to come back and saying that they needed me here.
"I think they’ll be as happy as I am that I'm back and I’m sure we have a great year ahead of us this season.
“When the coach, the club, the players and everyone is asking you to stay for another year, you realise that they see you as a good team-mate and a good player,” he added.
“I feel proud that the club, the coach and – most importantly – the fans wanted me to stay. I didn’t doubt it for a second.
"We’ve been negotiating around my contract all the time, right up until today, but I’m very happy to be back here and that I’m going to be with Arsenal for another year.”
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