The Argentina international remains in an uncertain position in the Spanish capital following his preseason return after reaching the 2026 FIFA World Cup final in July.
Alvarez stunned Simeone during the tournament after claiming he wanted to leave the club and head to rivals Barcelona this summer.
Simeone has rejected claims the club are ready to sell the former Manchester City attacker and club CEO Miguel Angel Gil Marin confirmed his intention to block any offers, and reintegrate the striker back into Atleti's squad.
Barcelona are not in a position to bid over €150M in the final days of the transfer window and Alvarez is reportedly not interested in a move to Premier League champions Arsenal.
The 26-year-old was not involved in Atleti's 2-0 LaLiga season opening win over Malaga in midweek, but Simeone confirmed he's in the squad to host Villarreal tomorrow.
"He'll be in the squad. He's progressing well in his fitness. We're in the process of managing playing time and our opponents don't have that problem
"Let me be clear. There's no uncertainty. Miguel Angel spoke clearly. For me, he's a crucial player for achieving our sporting objectives.
"We're going to support and take care of him. Why? Because he's our player, and as long as he's at Atletico, I'm going to do that."