Former regular Luongo most recently played for the national team in January 2019. But the 31-year-old's stellar form with Ipswich Town, who are currently second on the Championship table, made him impossible to overlook for friendlies against England and New Zealand.
"He's been excellent at Ipswich," Arnold told Socceroos media. "When I first took over, he was an integral part of the set-up and the plans ahead, but he had a couple years of injuries.
"You can see he's in a very happy place mentally at the moment in Ipswich and he thoroughly deserves a call-up."
Luongo will provide crucial experience, especially with Mathew Leckie injured.
"We are going through a bit more of a rebuild situation at the moment," Arnold said. "When you look at the squad overall, 11 players have had less than 10 caps, there's five or six players that have had between 11 and 20.
"Awer Mabil scored two goals and [had] an assist on the weekend as well and it's great to have him back in camp," Arnold said.
"Against Argentina and Mexico we went with more midfielders and no wingers because they were injured or weren't playing.
"But this time we've got a number of the wingers back and we've gone more with them."
Australia play England at Wembley on October 14 before facing New Zealand in the revival of the trans-Tasman "Soccer Ashes" rivalry, at Brentford four days later, as they prepare for November's World Cup qualifiers and January's Asian Cup.
"To have an occasion at Wembley, where the Socceroos have never played before, is going to be extra special," Arnold said. "So I'm looking forward to first and foremost, a great performance from the boys, and winning the game.
"I did a bit of media the other day with English media and they're still talking about Upton Park in 2003 and how we beat them 3-1.
"That's the type of rivalry that you need as well, for that excitement."