Loftus-Cheek spent last season on loan at Palace and impressed enough to earn a place in England's World Cup squad, returning to Stamford Bridge for 2018-19 in the hope of enjoying more game time following the exit of Antonio Conte.
But with Jorginho and Mateo Kovacic adding to the January signing of Ross Barkley, new coach Maurizio Sarri is spolied for choice in midfield, so much so that neither Danny Drinkwater nor Cesc Fabregas have made a single Premier League appearance this term.
Loftus-Cheek has featured just twice from the bench, and has not played enough to persuade Gareth Southgate to pick him in the latest England squad.
Hodgson remains an admirer of the 22-year-old, and indicated he'd be happy to bring the midfielder back on loan should the opportunity arise.
"Ruben Loftus-Cheek did an outstanding job for us when he came here," Hodgson told reporters on Friday.
"He really answered all the questions that we hoped he would answer, and luckily for us, and even more for him, it got him recognised by the national team.
"He found himself in Russia representing England, which was a perfect end to the season he had for us.
"We admire him, we like him very much and we wish him well, and of course, like a lot of other clubs, I'm sure when the day comes when he becomes available for a transfer, we will be sticking our noses into that, but whether we will get him again, that's another matter. Who knows, we will see."
Palace will face Wolves on Saturday at Selhurst Park in Premier League action.