The Gunners finished eighth in the Premier League.
Arteta was backed by the Arsenal board earlier this year as he struggled to get results, eventually ending the season empty-handed and with an eighth-place Premier League finish.
The Spaniard was appointed in December 2019 and guided Arsenal to FA Cup success less than eight months later.
Pressure mounted on the 39-year-old during a sticky spell over the winter where some of the fanbase called for the former captain to be sacked.
Flamini feels his old team-mate should be given more time to get Arsenal back to winning ways – but has to turn things around sooner rather than later.
“There is a board which is in place to make this decision – they confirmed Mikel as the manager to rebuild the team and it is obvious then that he needs time,” he told the PA news agency when asked if it was a good decision from the club to back Arteta.
“At the same time, I understand why fans are frustrated because Arsenal is a big club and they have to be in the highest level in the Premier League.
“It is great that he is getting an extended time at the club and I am sure he will give everything to have a much better year.
“Being a manager of a big team is not an easy job, there is plenty of pressure and you have to deliver – especially next year with both him and the players.
“Everyone wants to see the team getting back to the top level because Arsenal is such a big club, we all want to forget about what happened this year and we are all hoping for a better season.”
Flamini, speaking at the launch of Unity U Ultra supplements – a company he co-founded with Mesut Ozil, also believes the disappointment of last season should be used as motivation for Arteta and his squad when they return for the 2021/22 campaign.
“I think when you are a football player you have to accept that sometimes you are going to lose and sometimes you are going to fail,” he said.
“I think failing doesn’t have to be something that is always negative because what is the definition of winning? It is when you fail you get back up and make sure you keep moving forward.
“I’m sure everyone at the club will learn what happened this last year and now the focus has to be to get everyone fresh, I hope everyone will have a good break and come back desperate for a stronger season because we all need it, it is so difficult seeing Arsenal in such a position.
“If I had to look at a positive from the season I would say definitely the expansion of some of the young players, that is of great merit to the Arsenal academy and to the people working to find the new talent.
“That has been a positive but obviously it is not enough, Arsenal need to be able to find the right balance between these young players and also experienced players because winning the Premier League or being in the top four is not easy – it is a fight every three days.”
:: UNITY co-founders Mathieu Flamini and Mesut Ozil have launched their new U ULTRA supplements, developed in collaboration with the University of Westminster – visit www.unityperformancelab.com for more information.