By the end of his spell in London, the 28-year-old Mustafi was regarded as an error-prone player who didn't fit with Arsenal's new approach under Mikel Arteta of defenders playing the ball out from the back.
Mustafi, who left Germany to join Everton in 2009 followed by spells at Sampdoria and Valencia, will make his Bundesliga debut at the bottom for a team with the worst defense in the league. Schalke has conceded 49 goals and has won just one of its 19 games.
Khedira, a teammate of Mustafi's when they won the World Cup with Germany in 2014, also reportedly had offers from England, but he joined big-spending Hertha despite its struggles in the Bundesliga. Only goal difference was keeping Hertha out of the relegation zone after 19 rounds.
"I know his leadership qualities and so am very happy that we now have him under contract at Hertha," said the club's new sporting director, Arne Friedrich, who played with Khedira for Germany at the 2010 World Cup.
Friedrich took over his current position only just over a week ago when Hertha fired its longstanding general manager Michael Preetz.
Hertha was targeting European qualification in its second season since investor Lars Windhorst started backing the club in June 2019. The financier has pledged 374 million euros ($450 million) to Hertha altogether, but a host of signings have failed to make their mark.
Khedira rose to prominence at Stuttgart, winning a Bundesliga title in 2007, then joined Real Madrid in 2010. He spent five seasons at the Spanish giant and joined Juventus in 2015.
Khedira has barely played in over a year, however. His last competitive appearance for Juventus was last June 12 in a cup tie against Milan. His previous appearance was in November 2019.
Recurrent injuries and an operation for a heart issue in February 2019 didn't help. Altogether, Khedira played 99 league games for Juventus. He played 102 for Real Madrid.
"I feel very good physically and would like to use the experience gained in recent years to help the team and lead Hertha BSC to greater sporting success," said Khedira, who could make his Hertha debut against Bayern Munich on Friday.
Hertha also signed Serbian winger Nemanja Radonjic on loan with an option to buy from Marseille. The 24-year-old Radonjic scored seven times in 50 French league games since switching in 2018 from Red Star Belgrade.
City rival Union Berlin signed 22-year-old Croatian forward Petar Musa on loan from Slavia Prague. Musa scored 11 in 35 games for the six-time Czech champion.
Also, Eintracht Frankfurt signed the highly rated 18-year-old Turkish forward Ali Akman from Bursaspor, and Hoffenheim signed American defender Chris Richards on loan from Bayern Munich to the end of the season.
The 21-year-old Richards knows Hoffenheim coach Sebastian Hoeneß from their time together at Bayern's reserve team.