The Mexico international was all set to join the Yellow Submarine in 2012-13, but the deal is dead due to the Spanish outfit's relegation from La Liga
"We were very advanced in negotiations with Villarreal so that Giovani could join them next season, but with their relegation everything has been halted," said Vicente Montes to Mexican newspaper La Afición.
Dos Santos found success in a loan spell with Racing during the 2010-11 season, in which he helped the Santander outfit avoid relegation with a splendid personal run of play.
His performance, coupled with a successful run in the Gold Cup as well as participation in the Copa America, seemed to signal a coming transfer from Tottenham Hotspur. A deal to send him out of London, however, never materialised.
The winger joined Tottenham in 2008 on a sale after breaking in to professional soccer with Barcelona a season earlier. With limited first-team action, Dos Santos had been loaned out to Championship side Ipswich Town and Turkish team Galatasaray as well as Racing.
Addressing persistent rumours linking the player to the MLS or the Mexican Primera Division, Montes was clear: "Gio's idea is to play in Spain. He wants to play there because he's done well, he made progress and he wants to restart his career in that league."