Ceballos enjoyed a breakthrough season last year with hometown club Betis, playing 30 times in La Liga and catching the eye with some fine displays in attacking midfield.
Despite being warned about potentially spending lots of time on the bench should he move, Ceballos agreed a six-year deal with Madrid in July after a reported €16.5 million bid had been accepted.
And, predictably, 21-year-old Ceballos has struggled to make a splash among Madrid's sea of attacking players, playing just 10 times in La Liga, with only two of those coming from the start.
As such, he continues to be linked with a move away from Madrid and Joaquin says he would be welcomed back by Betis.
"He is a fantastic player that would be an important part of any team and obviously he will want to play.
"We had two seasons together and he has an immense potential.
"We would welcome him back with open arms because we know what Betis means to him. He would improve us, and we would improve him."