Cazorla left Arsenal in 2018, having played at Arsenal for six years, winning two FA Cups during that time.
The Spaniard was a fan favourite amongst the Arsenal fans and his role as a diminutive creator earned him the nickname 'Little Magician'.
Mikel Arteta was the Gunners' captain toward the end of Cazorla's time there and the two shared a fond relationship.
Balague believes the pair could be reunited if Cazorla goes back to Arsenal as a member of Arteta's coaching staff.
"It's interesting because I spoke to Santi not so long ago and he hasn't renewed his contract with Villarreal which finishes at the end of the season," Balague told his Ask Guillem Q&A show on his YouTube channel.
"Basically what may happen, he wants two more years playing. Two more years.
"Going back to Arsenal with Arteta is something that I think he will consider as a coach.
"I asked him about it, he said yes, he will consider as a coach when he retires but he wants to play for two more years.
"I tell you what, Mikel Arteta and Cazorla together, really good friends first of all but really good special minds of football."
Cazorla left North London after he was hit by an injury, which appeared a regular set-back but escalated to a career-threatening situation.
The 35-year-old's return to Villarreal, where he began his career, was tinged with sadness on his behalf due to not being able to say goodbye to Arsenal.
"I don't know if it's possible or not, but I want to play one more game for Arsenal before I retire. It was a deep regret that I could never have a proper goodbye," he told Goal.
"It was a deep regret that I could never have a proper goodbye. Arsenal was the biggest club I ever played for."
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