Simpson will play for the Wolverines when they meet No. 25 Rutgers at Madison Square Garden on Saturday.
In a statement, Simpson apologized for what he called "some disappointing decisions" he made over the weekend that violated team rules. He did not specifically say what happened.
"I am looking forward to moving on from this," Wolverines coach Juwan Howard said. "Anything further will continue to be handled from within."
Howard said he met with Simpson on Friday and the two agreed to lift the suspension, which ended up being just one game -- a win against Nebraska.
"I accept full responsibility and having to sit out the Nebraska game was part of that," said Simpson, adding that he apologized to the team. "I deserved it and fully supported Coach Howard's decision. Not being with my teammates made it a long night, however, it gave me the time to reflect.
"... I know I let my coaches, teammates, and fans down as well as athletic department and community members. More importantly, I let myself and family down."
The 6-foot-0 Simpson is second in Division I in assists per game (8.3) this season. The senior also is Michigan's third-leading scorer, averaging 12.8 points and 4.3 rebounds while playing a team-high 33.8 minutes per game.
Before the Nebraska game, Simpson had not missed a game in his Michigan career, a streak of 135 in a row that is now set to end. He is second on the school's career list in assists.