Nelson has been restricted to just 81 minutes of action this season.
"It was mixed reasons, Reiss was really convinced that he wanted to fight to stay here," said Arteta.
"And when you see that willingness and that passion and that security in a player, you feel tempted to keep him even though you know that opportunities are going to be restricted and he is not going to have a lot of continuity in his play.
"We ended up with a large squad at the end of the transfer market. We had a few plans in mind with Reiss. One of them was as well to send him on loan to get more minutes because of the competition we have upfront.
"But things change very quickly and if he starts playing, and playing well, and he does what he can do, why not? He could start to play more games."