On the dialer app of Android, when you start searching for something, and you click the arrow button on the left of the EditText, you get a circular ripple
just add this item in your
           <ImageButton
                android:layout_width="wrap_content"
                android:layout_height="wrap_content"
                android:background="?android:attr/actionBarItemBackground"
                app:srcCompat="@drawable/ic_arrow_drop_down_black_24dp" />
In Kotlin / Java you can do the following
fun View.applyCircularRippleEffect() {
    val backgroundResId = context.getResource(android.R.attr.actionBarItemBackground)
    if (backgroundResId != 0) {
        setBackgroundResource(backgroundResId)
        isClickable = true
        isFocusable = true
    }
}
// getResource extension
fun Context.getResource(resourceId: Int): Int {
    val out = TypedValue()
    theme.resolveAttribute(resourceId, out, true)
    return out.resourceId
}
I also fixed this problem in one of my projects. android:foreground="?attr/selectableItemBackgroundBorderless" is responsible for the ripple effect, that's why it is set in the foreground and android:clipToPadding="false" will prevent the ripple effect cut off and make it rectangular.It will keep your ripple effect circular.
<ImageButton
        android:id="@+id/navButton"
        android:layout_width="40dp"
        android:layout_height="40dp"
        android:layout_gravity="center_vertical"
        android:layout_marginLeft="8dp"
        android:foreground="?attr/selectableItemBackgroundBorderless"
        android:clipToPadding="false"
        android:src="@drawable/search_ic_back_arrow"/>
Create and set a ripple drawable as background. Something like this.
<?xml version="1.0" encoding="utf-8"?>
<ripple xmlns:android="http://schemas.android.com/apk/res/android"
    android:color="@color/grey_15">
    <item android:id="@android:id/mask">
        <shape android:shape="oval">
            <solid android:color="?android:colorPrimary"/>
        </shape>
        <color android:color="@color/white"/>
    </item>
</ripple>
If you want ripple effect which will not cross the circle boundary, you can check this code. It works for me perfecrly. Just remember, you have to give id=@android:id/mask in ripple_blue.xml
<ImageButton
    android:id="@+id/send_password_to_mail_image_view"
    android:layout_width="wrap_content"
    android:layout_height="wrap_content"
    android:background="@drawable/ripple_blue"
    android:src="@drawable/ic_filter" />
ripple_blue.xml
    
<ripple
    xmlns:android="http://schemas.android.com/apk/res/android"
    android:color="@color/colorRipple">
    <item android:id="@android:id/mask">
        <shape android:shape="oval">
            <solid android:color="@color/colorWindowBackground"/>
        </shape>
    </item>
    <item android:id="@android:id/background">
        <shape android:shape="oval">
            <solid android:color="@color/colorWindowBackground"/>
        </shape>
    </item>
</ripple>
color.xml
<resources xmlns:tools="http://schemas.android.com/tools">
    <color name="colorWindowBackground">#F2F5FC</color>
    <color name="colorRipple">#0288d1</color>
</resources>
Another attribute with round ripple effect, specially for action bar:
android:background="?actionBarItemBackground"
UPD: Ripple color can be changed by this attribute:
<!--somewhere in styles-->
<item name="colorControlHighlight">your_color_here</item>
But keep in mind, this attribute applies to all default ripple effects.