The former Manchester City striker is being linked with a move away, with Barcelona keen.
But after their 4-0 win against Girona in their final game of the season, Simeone insists Alvarez was a key part of their future plans.
He said: "Stability at the key moment of the season. Getafe was the turning point. Then we lost against Barcelona after taking a 2-0 lead and everything became more difficult.
"But there are also positive things: look at Julian, what he did was crazy. A player like that, who has won so many things, does everything with simplicity, even when he could score and instead needs a teammate.
"We need that Julián, he's the one we wanted to find, he's here and I hope he's happy to be part of this team.
"We'll help him to enhance all his talents."