Winger Dembele has been out since November after rupturing his thigh muscle but is in line for a long-awaited return in Lisbon on Friday.
Setien told a pre-match news conference: "We have arrived in good spirits. This is the game we are waiting for. We have prepared well.
"It is a satisfaction for all of us that Dembele is in the squad and I think he will be in a position to participate for a few minutes if we consider it appropriate. We are excited that he can play and get it right."
Bayern look well placed to go all the way in the competition, having romped to a domestic double in Germany and swept Chelsea aside in their previous European tie. Barcelona, on the other hand, lost their Liga title to rivals Real Madrid and have struggled to convince in recent months.
Lisbon— FC Barcelona (@FCBarcelona) August 13, 2020
We have arrived! pic.twitter.com/PNeFvBwO34
Nevertheless, Setien remains positive of their chances, saying: "Of course, we are convinced we can go through. We know the potential of the opponent, their numbers and their capacity, with extraordinary potential, but we have that, too.
"I think it will be an even game. We have a lot to say in this game."
Setien believes it is crucial that Barcelona concentrate on their own game and not get subsumed by countering Bayern, saying: "It will be important to have the ball because that will allow us to defend ourselves for less time without it, but everything will depend a little on the opposition, as it usually happens.
"Motivation is intrinsic in this team, it is a very important game against a great rival, so one thing is the statements and another what happens on the pitch. We are two great teams who will want to play according to their identity."
The coach is keen to ensure Lionel Messi is not left to do the job alone, however, even if he is highly likely to play a key role.
"Leo can help win the game, obviously, but I have always believed in the strength of the team," Setien said. "We will have to assist Leo because both Messi, like any other outstanding player, is weaker without the strength of the team."