Luongo quit the Socceroos last December when all set to be picked for Australia's Asian Cup squad for the continental tournament in Qatar. The 31-year-old, who made 45 appearances for Australia, cited a need to preserve his body as Ipswich Town pushed for back-to-back promotions.
A midfielder playing in England's top flight would be a handy addition to Arnold's squad as they bid to qualify for the 2026 World Cup.
"First and foremost, it's fantastic to see Mass doing it," Arnold told reporters on Wednesday.
"He gave the details... why he retired and that's probably where it's at at the moment, but it was great to sit up the other night and watch him play."
Australia sailed into Asia's third phase of qualifying but now face a tough journey to North America, having been drawn in Group C with continental heavyweights Japan and Saudi Arabia.
Australia's next qualifier is against Bahrain on the Gold Coast on September 5.
Arnold said he would have no hesitation in calling up 18-year-old Nestory Irankunda, the Bayern Munich winger who made his international debut against Bangladesh in June and became the second youngest player to score for the Socceroos in his second match against Palestine.
"I'll be interested to see the difference in him in just three months - since the Bangladesh and Palestine games - where he was very impressive," said Arnold.
"I think there will have been a lot of work on his fitness levels. I think there'll be quite a lot of work in the gym for him.
"Over there in Germany, they're playing two or three games a week, and he's got to get used to that, where, obviously, back here, it's one game a week, and those types of changes are significant, but his body will change for sure."
