The Reds appear close to capturing £17million-rated Portsmouth and England right-back Glen Johnson, sparking speculation manager Rafa Benitez will look to trim his squad.
Former Real Madrid and Deportivo La Coruna player Arbeloa has, therefore, been linked with a £7m return to the Bernabeu in order raise funds and make room for Johnson.
The Salamanca-born 26-year-old, who has 12 months remaining on his current deal at Anfield, is flattered to be a rumoured target of new-look Real.
He told Elmundo while on international duty at the Confederations Cup: "I am happy at Liverpool, but I have something to prove in Spain as I did not show my best form in La Liga. One day, I'm sure I will return.
"It is always nice to be linked to big teams - even to this Madrid side in a time of transition. They are working hard to build a great team. I have one more year remaining on my Liverpool deal, but anything can happen.
"A contract renewal is in the air. I am contracted for one more year, but if Liverpool get an offer they will consider it. It is all in the hands of my agent."