The experienced defender has been linked with a reunion with Rafael Benitez.
The report cites sources inside the club as playing down the rumours, with manager Rafael Benitez instead focused on securing attacking reinforcements first and foremost.
Arbeloa would add considerable experience and quality to the Magpies’ back-line but it is unclear whether he would be willing to embrace Championship football after seven successful years at the Bernabeu.
The 33-year-old would be available on a free transfer, with his contract due to expire this month, and he could represent quite a coup for Newcastle.
Benitez is yet to make any additions to his squad as he prepares for a promotion push next season and the Toon Army will hope to see some movement soon.
One target believed to be on the radar is Crystal Palace striker Dwight Gayle, with the Daily Mail reporting that a £10 million bid is due to be lodged this week.
The Eagles frontman has a proven goalscoring record and has the potential to thrive in Championship while never really convincing Alan Pardew of his quality - making the switch a sensible one for all parties.