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Ceballos impressed in his first season on loan at Arsenal but was unable to make such an impact in the 2020-21 campaign.
In 40 appearances across all competitions, he provided three assists – from a total of 41 opportunities created – yet failed to score himself.
A passing accuracy of 87.61 per cent last season also ranks him below the average (88.01) of Arsenal midfielders, albeit only Granit Xhaka (3,107) attempted more passes than Ceballos (1,865).
With Carlo Ancelotti having just been appointed as Madrid's new coach, Ceballos is expecting things to be different to how they were under Zinedine Zidane.
Though while he is determined to succeed at Madrid, he has acknowledged his future may lay elsewhere.
"Ancelotti has just arrived and we need to talk," he said on Spanish radio station Cadena Ser.
"I think this year I have hardened as a player. I think it is time to settle in a club with a long contract and to be able to show my game.
"Ancelotti has just arrived and we need to talk. I want to know what he wants from me and also tell him what I want, which is important. I'm not going to the Euros and soon there will be a World Cup. It has to be a talk between the two of us with clear things.
"It is not the same to be involved in the dynamics of a club with a long contract, as it is to be on loan. It is something that these last two years I did not have and I want to settle down, play and be happy."
Moves which would never come to fruition for the 24-year-old would be a switch to the Camp Nou or Sevilla.
Asked if he would consider a move to the likes of Paris Saint-Germain, Juventus or Barca, Ceballos replied: "I would not go to Barcelona because I am a Madrid player and my dream is to succeed at Madrid."
When quizzed on a transfer to Andalusia, he added: "It is a great club, but I would never play for Sevilla, especially having my [time at] Betis."