The France international was widely expected to leave the Catalan giants during the January transfer window, having refused to sign a new contract at the club.
Dembele has been left out of the squad for Barcelona's last two matches amid the uncertainty surrounding his future, and there were claims that he had played his last game for the club.
However, the World Cup winner has been recalled for Sunday's clash with Atletico, with Xavi insisting that the attacker 'can help the team' between now and the end of the campaign.
"We have not found a solution to Dembele's situation. The circumstances were one way a month ago and another now," Xavi told reporters.
"He is part of the club and the squad, he has a contract. We met with the president, the board and the technical secretariat and we have decided, just as we said [whether] he was renewing or leaving, that he is part of the squad and we cannot shoot ourselves in the foot.
"We have to use him, he can help us. He has been a good professional. It is a club decision and I'll use him when I think it's convenient. He's one more [player]."