According to Adriana Garcia of ESPN.co.uk, the injury-plagued Spaniard has agreed to terms that include the option of a further season extension, and the deal will be announced on Thursday at Villarreal's Ceramica Stadium.
Cazorla, 33, left the Gunners earlier this summer after his contract expired.
He had not played for the north London club since October 2016 because of enduring complications with an Achilles tendon injury.
On July 17, however, he came on for Villarreal in a pre-season clash with Hercules, per Goal:
Per the club's official website (h/t Garcia), Villarreal manager Javi Calleja previously said: "If everything goes according to plan and there are good vibes, Santi will be a luxury reinforcement for us."
Clearly he has shown he can be an asset in the coming season.
Cazorla has spent two previous spells in the Villarreal first team—from 2003 to 2006 and 2007 to 2011.
There are likely many who feared he would never play again given the severity and duration of his Achilles injury.
But it looks as though Cazorla will turn out in La Liga again next season, with Villarreal's 2018-19 campaign kicking off against Real Sociedad on August 18.