Long was reported to be in a stable condition on Thursday and was expected to remain in the Maryborough Base Hospital for 24 hours, after which police will interview him.
The backpackers died when fire tore through the Palace Backpackers Hostel last Friday in Childers, 185 miles north of Brisbane. The fire killed six Britons, one Irish national, four Australians, two Dutch, one Korean and one Japanese.
Acting police commissioner Graham Williams said the 37-year-old itinerant fruit picker had been upgraded from a witness wanted for questioning to a suspect. He declined to give any other information on how Long was arrested.
"Call him what you want, as far as we are concerned he is a witness and he's a suspect," Williams said.
Long was shot in the arm on Wednesday after he lunged with a knife at police who had tracked him for two days through thick bushland outside Childers. A police officer received facial injuries.
Police received a tip-off from a local resident who knew Long on Tuesday and started searching through the rainforest bushland with tracker dogs and two helicopters.
Regional crime coordinator Jeffrey Oliphant said police were waiting for clearance from doctors before they could interview Long.
"We have to wait until he has finished undergoing any medical treatment," Oliphant said.
Williams said the investigation was still in its early stages with a lot of work to be done before making a decision about charging Long.
"He'd have to be interviewed first and there'll be other people to be interviewed and until then a decision won't be made," he said.
Police said Monday they had found at the site of the blaze a suicide note possibly signed by Long.
Handwriting experts were examining whether the letter was written by Robert John Long, 37, who was evicted from the Palace Hostel days before Friday's fire, Chief Supt. Ken Benjamin said. Long remained missing Monday.
The cause of the blaze has yet to be determined, but police suspect arson. Police said they were looking into a suicide note believed to be written by Long, an itinerant fruit picker originally from Sydney.
Because the handwriting hadn't been verified, Benjamin said he couldn't comment on the note. However, Childers pub operator Chris Woods said Long had left a suicide note at his bar on June 13.
Long was thrown out of the hostel for falling behind on his rent.
Police have taken statements from up to 100 people, including the 70 survivors who were forced to flee the inferno in the town of 1,500 situated 195 miles north of the state capital of Brisbane.