The talented 18-year-old headed through the exits at Emirates Stadium in August after being made aware that first team opportunities in north London would be hard to come by.
He is, however, still held in high regard by his parent club and was tied to fresh terms before seeing a loan switch sanctioned.
Former Arsenal defender and World Cup winner Mertesacker told the Gunners’ matchday programme of Nelson’s bold development call: “It was the best decision for him to go there.
“When you compare the Bundesliga to the Premier League, there are similarities but there are differences.
“At the moment the Bundesliga suits him, and he went to a club where they are used to bringing up young players, educating young players and giving young players a chance in their first team. He has a young coach who will educate him and give him an insight.
“Reiss is getting out of the comfort zone he was in at Arsenal, so the loan system should work brilliantly for us.
“Some Bundesliga clubs are very interesting for us and the way he could make an impact at Hoffenheim was by starting on the bench but then scoring immediately.
“Through scoring those goals, he gained trust from the coach, from the fans, by learning some German and earning the right to start and make an impact.
“I think he has done a brilliant job but that all fell into place because he wanted to go.
“He had a great opportunity but you need to take these opportunities and make sure you learn from those moments. Instead of being a first-team player between the under-23s and the first team, this is something different.
“It’s difficult to manage and I’m really pleased and glad that it’s worked right now for him.
“We have other prospects we really need to think about. What’s their best path towards making an impact for our first team? There are different ways, different challenges.
“Those are individuals. But I feel we are in a good place right now and those situations show us how big an impact a loan can make on a player. We need to select wisely.”