The EastEnders actress, who plays Kat Slater on the Albert Square soap, is reportedly dating for the first time since calling off her wedding to ex Vince Morse. She apparently met the 36-year-old at the British Soap Awards last month.
"It's early days but you can see how much she's into him," a source told The Mirror. "He is a thoroughly decent bloke, too, so it's a great match."
Arnold, once of mid-'90s Britpop band Jocasta, was treated for crack cocaine addiction in 2003. Godmother June Brown - Wallace's co-star and Dot Cotton in the BBC serial - financed the trip.
His mother Polly Perkins is also on EastEnders, starring as Dot's half-sister Rose Cotton.
Wallace split from former fiancé Morse after she discovered he had been sending lewd emails to an ex-girlfriend.
After publicly apologising for his actions on ITV1's This Morning, Morse claimed that the pair could reunite sometime in the future.
Wallace, 40, returned to EastEnders in April after a three-month break due to the stress of the wedding cancellation.