Xhaka was involved in an angry confrontation with the club’s fans in a Premier League game against Crystal Palace at the Emirates Stadium back in October when Unai Emery was in charge.
That confrontation led to the former Borussia Monchengladbach midfielder being stripped off the Arsenal captaincy barely a month after he was handed the armband on a full time basis.
Xhaka’s future at the Emirates has been at the centre of discussion since, as reports suggest a move back to Germany with Hertha Berlin could be on the cards in the winter transfer window.
Arteta is however keen to see Xhaka stay put in North London, having tried to recruit him from Monchengladbach during his early days as Guardiola’s assistant at Manchester City.
“When I was going from Arsenal to City to start coaching and we were looking in that position, he was one of the players on my list,” Arteta said.
“This is how much I liked him. 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 has got stuck in a very difficult situation that, I think, was growing and growing and growing and one day it exploded. But I have been amazed as well by how this relationship is starting to come back a little bit and I think the fans have been very, 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 with him.”
"I told him how much I like him and what I expect from him," Arteta added.
"How important he is for the team. I am here to help him, I want him to feel that we are right behind him. Not just myself but the whole club.
"If we can get the people in the right way as well, the fans with him, I think it will be helpful for the team, which is where it matters."
Arteta will make his managerial bow with Arsenal on Boxing day when they travel to Bournemouth in the Premier League.