The sacked club captain has agreed personal terms with Hertha Berlin ahead of the winter market.
However, Arteta said: "At City, we were looking at players in that position - he was on my list.
"I have told him how much I like him and what I expect from him — and how important he is for the team.
“I am here to help him, I want him to feel we are right behind him. Not just myself but the whole club. If we can get the fans with him, I think it will be helpful for the team.
“I was happy when Arsenal signed him because I thought he was going to be a terrific player.
“He has done some really good things and now he's got stuck in a very difficult situation that, I think, was growing and growing and one day it exploded.
“But I have been amazed by how this relationship is starting to come back a little bit and I think the fans have been very positive about him.
“Obviously it is difficult to change completely the scenario from where he was to a magnificent one. But I think we are in the right direction."