Gudjonsson had been on a season long loan deal at Villa Park and ex-boss Graham Taylor had hinted at making the midfielders move from Real Betis a permanent one.
However, with Taylor now gone from Villa, Gudjonsson's future at the club has been left in tatters and he has returned to Iceland.
“Joey is back in Iceland and wondering what is going to happen about his future," the players father told the clubs official website.
“He loved it at Villa. Not just the club and the play-ers but the supporters as well. He really enjoyed his spell at the club.
“And the hardest part is he could have played so much better. The supporters did not see everything that Joey can do. He is a great link-up player as well as a hard-tackling midfielder and he can score goals.”
He continued: “But with Graham gone now everything is up in the air for him. From what I know the coaches were all very pleased with what he did while he was on loan.
“It was not only Graham who liked him - he was appreciated at every level. But now he is in the worst kind of position. I know he wants to come back but these are the kinds of difficult situations you sometimes face in football.”