The diminutive Spaniard, 33, has not played for the Gunners since October 2016, when he helped his team to 6-0 win over Ludogrets in the Champions League.
Last year, he told how he came close to needing his foot amputated due to infections following a string of surgeries.
Arsene Wenger refused to put a timescale on his return but the latest news will come as a real boost to Arsenal fans.
Europa League clubs had to submit an updated squad list for the knockout stages.
New signing Pierre-Emerick Aubameyang was not included having played for Borussia Dortmund earlier in this campaign.
Henrikh Mkhitaryan is included as is fellow new boy Konstantinos Mavropanos alongside midfielder Cazorla after his injury problems.
The spaces in the squad came following the departures of Alexis Sanchez, Theo Walcott, Olivier Giroud and Francis Coquelin.
Mkhitaryan will wear the No.77 shirt in the competition as the No.7 was previously worn by Sanchez.