The striker is currently fighting with Harry Kane, Daniel Sturridge and several other for an England role.
The Gunners forward has been given his chance to impress in a central role at the Emirates this season having craved a centre forward role for much of his career.
He has failed to shine in it though, with just four Premier League goals to his name so far in this campaign.
Despite that, Hodgson handed him an England call up for the recent international friendlies with Germany and the Netherlands.
Hodgson though, has warned him that he must be a regular for his club if he is to make the squad for Euro 2016 this summer.
“It’s going to be harder for players who don’t get a chance to show what they can do because they don’t make their club team," the Mirror reports him saying.
“For Theo, he, like quite a lot of other players, will have to try hard to get back in the Arsenal team, otherwise I will not be seeing enough of him.”
"But we know Theo Walcott, we know what he can do and it will be a balance.”
The problem for Walcott is that he faces a stern fight to make it into the Arsenal team either up front or as a right-winger.
Olivier Giroud has done well as the lone striker this season, while youngster Alex Iwobi has impressed when given the chance in recent weeks.
Similarly, Joel Campbell has taken his chances with both hands this season and performed admirably in the right wing role, leaving Walcott with a fierce battle to get into the team.