The SFV and Xhaka agreed that he would miss Switzerland's October Nations League fixtures with Scotland, Slovenia and North Macedonia, after the midfielder admitted to acquiring a fake certificate in order to be able to travel and compete in 2022.
Forward Embolo was also dropped from the Switzerland squad later in September for the same reason.
"The SFV has examined the two cases comprehensively and has come to the conclusion that the return of the players after the conclusion of the legal proceedings and taking into account the sporting consequences (four missed international matches in September and October) is justifiable," the SFV said in a statement.
"We are convinced that a return to the national team in November is responsible and right," added national team director Pierluigi Tami.
Both Xhaka and Embolo were given a suspended fine of 150,000 Swiss francs ($181,225), which will be in place for a probationary period of two years.
Xhaka apologised and took responsibility for his actions, calling it 'a mistake'.
The statement went on to confirm that Xhaka would not have the captaincy removed, highlighting that the decision remains with the team and the coach, Murat Yakin.
Switzerland face Slovenia and Scotland in their final two Nations League group games in November, and sit top of Group E with 12 points.