Luiz is into the final six months of his current deal at Emirates Stadium and he is able to talk to foreign clubs ahead of a free transfer in the summer.
The 33-year-old has openly expressed his desire to go back to Benfica before he retires, where he spent four years from 2007 to 2011, but Arteta says the centre-back staying for another season at Arsenal remains an option.
Asked if there was a chance of that happening, Arteta said: “We will see what happens.
“There are a lot of things happening around the club, a lot of decisions to make. I don’t want to rush any decisions. I just want players to be focused.
“They know that they have six months left or eight months left, whatever it is, some of them a year. They know that. Their contracts are like that, we cannot change that.
“We cannot change all the contracts right now. I think it is time to be focused. We have been through a difficult period in the last few weeks and I just want people to focus on football.
“If you do what you have to do on the football pitch, you will deserve the chance to keep with us if this is what you want.”
Luiz joined Arsenal in the summer of 2019 from Chelsea for £8million and since then he has had a mixed time in north London.
The Brazilian’s performances have fluctuated, but he has excelled at crucial moments - such as last season’s FA Cup semi-final against Manchester City.
The 33-year-old has also played a key role off the pitch and Arteta has praised his work behind the scenes with young players.
“He is fantastic. He is one of the leaders in the dressing room,” he said.
“He is one of the most experienced players, he has won everything in the game. He is so good with the young kids.
“When you look at people who can help and be a role model, he is always with them, he is always supporting them, giving them confidence and advice. It is great to have someone like him around.”
Luiz has struggled with his fitness this season and he has made just eight appearances in the Premier League.
The Brazilian impressed in the FA Cup on Saturday against Newcastle, though, and Arteta described his performance as “exceptional”.
Luiz faces a fight to keep his place in the team for Thursday’s game with Crystal Palace, however, as Rob Holding - fresh from signing a new long-term contract - is due to return and partner Pablo Mari.
Fellow centre-back Gabriel Magalhaes is also pushing to make the squad, while midfielder Thomas Partey is fully fit.
Forward Gabriel Martinelli is out after rolling his ankle in the warm-up against Newcastle, but he could be back next week.
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