If anything is plugged into the ethernet port on Apple TV, then it will try to use ethernet as network connection.
If the ethernet port is empty, then Wi-Fi options should become visible.
If the ethernet port is empty, but the settings menu still insists on ethernet, investigate the port itself, as the detection mechanism might be stuck. (E.g. plug in and release a cable once more, for the mechanism to try again.)
If that is not it, then it is time for a restart. If a restart doesn’t have the desired effect, then try unplugging from power for 2 minutes or so, then try again. If the issue persists, then try a restore of the system software. If the issue still persists, then it is time for the technicians at Apple to have a look at it.
Reset or restore your Apple TV to its factory settings - Apple Support
or Restore your Apple TV through a computer - Apple Support