Include external drive in Time Machine backup: compatible formats?

I want to also back up my external drive to another Time Machine drive, but when I want to stop Time Machine from excluding it, I can't, since it's not clickable:

Time Machine Preferences Screenshot

I know the problem is, that it has to be in another format (currently ExFAT). But which formats are compatible and which are best?


According to this article, the external drive has to be either an HFS+ drive or (since Big Sur) an APFS drive! I tested it with an external "APFS encrypted" drive and it worked. I was able to disable the exclusion in the settings and thereby back up the external drive to Time Machine!