The midfielder has returned to Real in recent days after seeing Olympique Marseille pull out of a move earlier this week.
Xabi said today: “I spoke to him. It doesn't change anything. He's stayed here and is part of the squad. I'm happy he's here. It's better for him to share the details of what happened, but it seems the decision is final.
"He'll continue to play the same role he was going to play. It doesn't change my opinion of him.”
Real Madrid will meet Real Mallorca on Saturday and Xabi is demanding a top performance before next week's international break.
He said, "Tomorrow we want to finish this first three-match stretch, almost the final phase of preparation, by growing. We took a step forward against Oviedo, and we want to take another step against Mallorca at home.
"We want the fans to like the team and finish on a positive note before the break."
On the form of Fede Valverde, Xabi added: "I see him as a key player for us on a day-to-day basis. He demonstrates his leadership on the pitch and inspires those around him. He can adapt to any type of game."