Ceballos has had a difficult second season on loan at Arsenal, and hasn’t quite hit the same heights he managed in his first season at the Emirates.
The 24-year old has made 23 appearances in the Premier League, but a further 11 appearances in the Europa League so far this season, but has explained that his style would work better in La Liga.
"I've had a bad time because I didn't have the consistency I had last year. These last 5 or 6 games I've played at a good level,” Ceballos told Onda Cero.
"To be honest I like La Liga a lot more. The Premier League is more complete but with my style, La Liga is much better for me. Another loan would be difficult from both sides, for Real Madrid and for me."
Dani Ceballos’ return to Real Madrid would be a blow to Arsenal
Although Ceballos was not at his best for the Gunners, they will need to replace the central midfielder with someone who can dictate the tempo of the game.
Ceballos might not break into the Real Madrid team if he moves back to the Bernabeu after leaving Arsenal, and has hinted that a potential spell at Real Betis could be good for him.
"I'm about to turn 25 in August and I have to settle at a club where I feel important, that's what I'll look for. I have a lot of affection for Betis, I'm a Betis fan, I watch every Betis game, [Manuel] Pellegrini is a really good coach who I like."
Ceballos is a natural dribbler on the ball and could be an elusive player in central midfield, something Real Madrid clearly saw in him when they signed him from Real Betis in 2017.
The midfielder has picked up his form in the last few games and will hope to help Arsenal to the final of the Europa League next month.