The 83-year-old was seen driving his red Skoda Fabia auto to The Street, close to the woodland where he walked his dogs Dylan and Gemma.
"Our main lines of inquiry include forensic investigations, extensive searches, witness interviews, house-to-house inquiries, CCTV capture and review and close liaison, as you'd understand, with Peter's family and our thoughts are with Peter's family at this hard time".
A spokesman for Norfolk Police said the arrested man is now being held in police custody.
On Friday, officers traced one of three "vital" potential witnesses - a man in his 50s who was seen changing into a T-shirt.
Yesterday CCTV footage of the victim was revealed showing him purchasing items in a Post Office half an hour before his body was found. It is believed he was wearing heavy rimmed glasses and light coloured pants.
The second is a white tanned male, between 5'9 and 5'11 tall, of athletic build, with short dark wavy hair, dark eyes and heavy duty flip flops.
He loved walking his two dogs and chatting with people he met, they said in a statement.
Little more than 30 minutes later, the "kind and gentle" 83-year-old was found dead in an area of Norfolk woodland, having been subjected to one of the most brutal murders county police officers have ever seen.
"To do this we need to piece together Peter's final movements so that we can understand what happened to him and why". We know that Peter's family and the people of the local area want to understand and we want to help them to do that'.
Anyone with any information should call The Operation Graduate helplines on 0800 056 0944 or 0207 158 0010.
Alternatively, you can contact Crimestoppers anonymously on 0800 555 111.