The actress spoke to Digital Spy about 'The Sword in the Stone (Part 2)', which will air on Christmas Eve.
"The ending is the basis of one of the main myths," she explained. "Not one that everybody's familiar with, but it's setting up a very powerful and pertinent myth that runs through the Arthurian legend."
McGrath added that the final shot of the finale "sets up season five so brilliantly".
"Before, you were [always] left on this lovely finishing note, because we didn't know whether we'd be commissioned [for another series]," she said. "We know that we're doing season five, so now this is just going to make you want it to be September next year and the start of the new season!"
The star, who plays Morgana on the BBC fantasy drama, suggested that the show could continue beyond the fifth series.
"It all depends on how [the writers] spin out season five and the legend," she said. "There's so many different interpretations [and] so many stories that they haven't told.
"You want it, whenever it ends, to end on the right note. If that takes seven seasons, if that takes ten seasons... you want to tell the story properly."
McGrath also admitted that she would be thrilled to star in the proposed Merlin movie.
"God, yeah!" she confirmed. "You want to bring it to the big screen – you want it to be better than [Harry] Potter!"
The fourth series of Merlin concludes on Saturday, December 24 at 8pm on BBC One.
Watch Katie McGrath discuss the Merlin finale below:
The Merlin complete series 4 boxset is out on DVD and blu-ray on January 23.