Danilo, who was called into the Brazil squad earlier this season but is yet to be capped by Tite, has already racked up 141 Palmeiras appearances despite his young age – scoring 12 goals during that time.
The Gunners have previously discussed a £22million move for Danilo with the South American club.
And the Premier League leaders are ready to return for further talks next month.
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Arsenal are also looking to add a winger to Arteta’s squad and have been tracking Shakhtar Donetsk’s Mykhaylo Mudryk, who has been happy to discuss a potential move to the Emirates in recent interviews.
Their push to win the title resumes on Boxing Day with a London derby at home to West Ham.