The midfielder has experienced a mixed campaign during his season-long loan but he has still managed to make 26 appearances for the club in all competitions.
According to Evening Standard, the Gunners are yet to hold formal discussions with Los Blancos but they are confident of extending Ceballos' temporary contract if required.
Ceballos' deal is scheduled to expire on June 30 but his services may be required beyond that period, particularly with the uncertainty when the current season may restart.
Ceballos has contributed just two assists for the Gunners in the Premier League. He has, however, started the previous three league games for the Gunners alongside
are currently lying in the ninth spot in the league standings, five points behind Manchester United, who are holding onto the final Champions League spot. They have a game in hand over the Red Devils.