The 31-year-old, who was excluded from selection for the third Test for disciplinary reasons, was due on a plane to Delhi on Monday having spent the last week in Australia to attend the birth of his first child.
As he made his exit from India last Monday, vice-captain Watson hinted he would consider his future as an international player. But he said this Monday: "I've had several constructive discussions with team management back in Mohali over the past few days."
Watson continued: "We've spoken about how we are going to work together to move forward, as Australia attempts to climb back to the top of the ICC rankings. I've a burning ambition to be an Australian Test player for as long as I can be and help Australia win those big Test series as well as the big ICC tournaments."
Watson was one of four players, along with James Pattinson, Mitchell Johnson and Usman Khawaja, who were made unavailable for selection for the third Test in Mohali after failing to complete an assignment set for them by coach Mickey Arthur.
He subsequently returned to Australia for the birth of his first child. His wife Lee gave birth to a boy, Will, on Thursday.
As he and Pat Howard, Cricket Australia's high performance chief, traded barbed comments, there was some doubt as to whether it would be possible for Watson to make a quick return.
But Watson said today: "I have also had a number of chats with Pat Howard over the last week and we are both now on the same page and are really looking forward to working together to get Australia to be the best team in the world.
"I'm looking forward to getting around the boys again and concentrating on moving forward. I'm entirely committed to the team and being the best player I can be."
Howard added: "Shane and I have had a number of positive conversations. I am glad to say that Shane will return from compassionate leave and rejoin the squad in India as the team prepares for the fourth Test in Delhi."