There's a good answer by /u/Claudius_Terentianus here which covers the general question of how much Latin Iberian soldiers in general spoke.

There's kind of an additional problem with your parameters though, and that's the problem of Roman citizenship. Enlisting as a legionary required Roman citizenship, and with some exceptions, indigenous populations in Hispania hadn't been granted citizenship by 40 B.C., that process didn't really come into full force until the 30s and 20s B.C. and didn't fully finish until the late 1st century AD.

For a good discussion of the timeline of citizenship being granted to Iberians, see Ju. B. Tsirkin, Romanization of Spain: socio-political aspect (II). Romanization in the period of the Republic.

So a legionary, rather than auxiliary, enlisting in Hispania in 40 B.C. would likely be the son of Romans or Italic people who settled in Hispania and thus speak Latin natively.