The midfielder has missed Newcastle United's last three games with a back problem.
However, Merino returned to training this week and Rafa Benitez today revealed that the 21-year-old had proved his fitness in time to line up against Watford at St James's Park.
United manager Benitez said: "Merino has been training. He's available and in the squad."
Jamaal Lascelles (ankle), Christian Atsu (thigh) and Paul Dummett (hamstring) remain sidelined.