The 35-year-old was substituted having been badly exposed by teenager Marcus Rashford, with his woeful back pass to Joe Hart causing the goalkeeper to suffer a calf injury.
His City team-mate Nicolas Otamendi is still recovering from a leg injury, however, prompting coach Gerardo Martino to push Demichelis into the fold in Tuesday's training session.
Sergio Aguero was preferred in the mock starting XI over Napoli sharpshooter Gonzalo Higuain, who scored twice against Genoa on Sunday.
Martino put the Albiceleste stars through their paces at the Ezeiza training ground complex as they warm up for the vital World Cup qualifier in Santiago.
With Javier Mascherano suspended for the match and Javier Pastore and Enzo Perez injured, the former Barcelona coach's midfield took on an unfamiliar look.
Matias Kranevitter, Lucas Biglia and Ever Banega lined up in the middle of the pitch, while there was also room in defence for Everton's Ramiro Funes Mori and Marcos Rojo of Manchester United.
The Copa America finalists meet on Thursday before Argentina host Bolivia the following Tuesday.
Possible Argentina XI v Chile: Sergio Romero; Mercado, Demichelis, Funes Mori, Rojo; Kranevitter, Biglia, Banega; Messi, Aguero, Di Maria.