Will my arrest prevent me from applying for citizenship?

An arrest may not only affect your application for citizenship, it can affect whether or not you can keep your Green Card.
The more severe the crime is, the more danger you are of actually losing your Green Card and being denied for citizenship.
In general, if the case was dismissed, you may be eligible for citizenship, or may get your application approved.
Immigration does have the authority to deny the case just by virtue of the fact that you were arrested.

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