Belgium international Carrasco has spent time training with Atletico and officially re-joined the La Liga club on Friday in a loan deal from Chinese Super League side Dalian Professional until the end of the season.
Atleti boss Diego Simeone was unsure if the winger would be registered in time to feature at the Santiago Bernabeu, but he has been named as part of the 20-man group for the clash.
Simeone can also call upon Lemar this weekend as the midfielder - strongly linked with a January exit - has recovered from a hamstring injury that ruled him out of the club's last six matches.
Club-record signing Joao Felix and fellow attacker Diego Costa remain absent through injury, while defenders Kieran Trippier, Santiago Arias and Jose Gimenez also miss out on selection.
Fifth-place Atletico are winless in their last two Liga matches, leaving them 10 points adrift of leaders Madrid, and were knocked out of the Copa del Rey by Cultural Leonesa last week.
Meanwhile, Madrid confirmed on Friday that Eden Hazard, Gareth Bale and Rodrygo Goes will play no part against Atleti, but Casemiro, Eder Militao and Isco have all returned to the squad.
Each of the last two clashes between these sides this season have ended goalless, with Madrid getting the better of their neighbours on penalties during the Spanish Super Copa final on January 12.
However, Atleti won an ICC encounter in July by a remarkable 7-3 scorelines.
Real have a poor record against their local rivals, with only one win on their last seven encounters in normal time.
Victory in Saturday's match would further strengthen Los Blancos' grip on first place, while it would leave Atleti's Champions League hopes under further stress.
Simone's men have not won any of their last four competitive matches, while their only goal scored in that run was against Leonesa in a 2-1 Copa del Rey loss.
With Liverpool looming in the Champions League later in February, it is not form that bodes well.