The former paratrooper met with Mr Ellwood at Westminster last week.
The 62-year-old started a campaign against mental health charity Combat Stress outside their base in Newport last October, which at first included a hunger strike that put him in hospital.
Since then, he and his supporters have been camped outside Combat Stress, in Audley Avenue, to highlight issues facing veterans.
On Thursday and Friday Mr Hales spoke with Mr Ellwood, highlighting the failings of the current system.
Mr Ellwood said: “I was pleased to meet with Gus to hear his concerns about the shortfall in support that he rightly deserves.
“I am committed to working with him and other veterans to ensure former service personnel get the support they need.
“We have agreed to meet again in the near future in order to examine how best to advance support for veterans.”
Nearly 3,500 people are now following Mr Hales’s story on his Facebook page, offering support and words of encouragement whenever he posts an update.
“The pressure is on,” Mr Hales said. “We need to show that we haven’t gone away.
“I do not seek fame, status, or prestige. I do not want to be an advocate for PTSD or any other condition, I do not want to start a charity, be part of a charity or lend my name to any charity. I do not want financial gain or to be rewarded by material gifts. I have merely seen an injustice.”
Mr Hales received an apology for the way he was discharged from Combat Stress’s care in the past. But he would still like there to be a full investigation into the charity.
Earlier this month Mr Hales revealed that his Facebook page had been hijacked to support other causes.
He said he was shocked to learn that money had been raised in his name.
He also alleged he has heard threats of violence in the course of his protest.
But he also said that he had now taken back the campaign and was working to "re-instate its integrity".