"In the lead-up to the Perth test, the management and Jadeja were of the opinion that the intensity of his bowling in the nets could have been higher. For this reason, he was not considered for selection," the BCCI said.
"Jadeja's left shoulder has continued to improve and he is now available for the third test of the series in Melbourne," BCCI said in a statement.
However, doubts remain over fellow spinner Ravichandran Ashwin, who is still recovering from an abdominal strain that caused him to miss the second test.
The off-spinner would be evaluated over the next 48 hours, India coach Ravi Shastri said on Sunday.
The visitors opted for a four-prong pace attack in Perth and suffered a 146-run loss that levelled the four-match series 1-1.
Virat Kohli-led India had won the opening test in Adelaide by 31 runs.
(Reporting by Shrivathsa Sridhar in Bengaluru; editing by Clare Fallon)
