He returned home after the 1982 World Cup, signing for Terry Neill's Arsenal for £500,000. Woodcock was Arsenal's top scorer for the next four seasons, his best tally being 21 in 1983–84; he hit five in a single game against Aston Villa, a post-war record for the club, he also scored the final goal in the last ever British Home Championship. He helped Arsenal reach the semi-finals of both domestic cups in his first season, and remained in favour with new manager Don Howe, who was appointed in December 1983 following the dismissal of Terry Neill after a dismal first half of the season. He also contributed to a strong start to the 1984–85 season for the Gunners, which saw them top the league in the autumn of 1984.
However, he suffered a serious injury in March 1985, which disrupted his career. With the arrival of George Graham as Arsenal manager in May 1986, the 30-year-old Woodcock was told he was surplus to requirements.
In all, Woodcock scored 68 goals in 169 matches for the Gunners.
Woodcock then returned to 1. FC Köln making 49 appearances and scoring 11 goals. He finished his career playing for Fortuna Köln, making 37 appearances and scoring 5 goals, before retiring from playing in 1990.