The Ecuador defender, 23, has joined on-loan from Bayer Leverkusen with an option to buy.
Arteta said: "We are so pleased to welcome Piero Hincapie to the club.
“Piero has a real physical presence, with his versatility and tactical flexibility giving us strong added defensive options. He is a big character, with a very good combination of both youth and maturity. He will make our squad stronger and more competitive as we continue into this season.
“We welcome Piero and his family to Arsenal.”
Gunners chief Andrea Berta also said: "We are delighted to have completed the loan signing for the season of Piero Hincapie.
“At only 23, Piero already has significant experience, both in the Bundesliga and at international level. He is an intelligent defender with real strength and versatility. His performances in recent years for both club and country have been of a consistent high quality, and we are confident Piero will continue to grow this season and be an important player for us.”