The Last Stand actor - who starred in the first three instalments of the sci-fi franchise - is expected to make some form of an appearance in the fifth movie.
He revealed that writing has now begun on the project, and that he is pleased with the direction of the film so far, having not been too fond of the original concept.
"They're writing right now Terminator 5," he told The Sun. "There have been some writers on it for the last year-and-a-half and they could not pull it off.
"We have told them over and over that they are going in the wrong direction, now they've finally got rid of those writers and they've got new really quality writers.
"Now they're going in the right direction. I think this year the script will be finished and we will be able to go into pre-production."
Terminator 5 has been rumoured to be a reboot of the series, while it was already given an R-rating last January.
Star Trek Into Darkness's David Ellison joined the project as producer last month.
Schwarzenegger also revealed that he turned down the chance to work with Sean Connery on the 1996 film The Rock.
"Jerry Bruckheimer came to me with the script for The Rock that Sean Connery and Nicolas Cage ended up doing. I was offered the Nicolas Cage part, but it was 80 pages, there were scribbles and hand-written stuff saying, 'This is s**t', let's not do this page, let's rewrite this'.
"I looked at this script and said, 'What is that? I can't commit to that. Why don't you get your act together and come back with a good script?' In the meantime they did get their act together and they hired Nicolas Cage. I really loved that movie, I thought it turned out fantastic.
"By the way, Nicolas Cage did an extraordinary job. I don't know if I'd be able to do as good a job as he did, but I was mad that I turned down that role because it was really a great role."
Arnold Schwarzenegger currently stars in The Last Stand, which opens at cinemas on January 25 in the UK.
Watch a trailer below: