Matic, who has made five appearances for his country, last played for Serbia in June 2012 and pulled out of the national team in December after falling out with Mihajlovic who said the Benfica playmaker did not fit his 4-2-3-1 formation.
But Serbia's poor run in the qualifiers, which left them with a slim chance of snatching a playoff berth, and the glaring problems in midfield forced the 44-year old coach to swallow his pride after the 25-year old's impressive performances for his club.
"I spoke to all the lads playing for Benfica and I was particularly happy to meet up with Matic," Mihajlovic told a news conference on Sunday after naming his 25-man squad for the home derby with Croatia on Sept. 6 and the visit to Wales four days later.
"We came to terms in a few minutes and I am delighted to have him back, but it is nonsense that he conditioned his return on being guaranteed a spot in the starting line-up.
"No player has ever asked for that kind of privilege under my tenure. The team picks itself and momentary form will determine who starts, we have enough time to prepare and see what the best options are," he said.
Serbia are third in Group A on seven points from as many games, nine less than bitter Balkan rivals Croatia and 12 adrift of leaders Belgium.
The Serbians have scored only three goals in their last five games and Mihajlovic was also delighted with the form of Matic's Benfica team mate Lazar Markovic, who scored a stunning equaliser in Saturday's 1-1 league draw at city rivals Sporting.
The teenage forward weaved past three defenders before slotting the ball home for his second goal in as many games for Benfica, whose forwards Filip Djuricic and Miralem Sulejmani are also likely to play a part against Croatia and Wales.
"Markovic is one of our key players because he gives us so many options up front and is more versatile than any other forward in our ranks," said Mihajlovic.
"He has started to find the back of the net too since his summer move to Benfica from Partizan Belgrade and we are relying on him because he has the ability to create at least three or four clear-cut chances for himself in every match he plays.
"I know nine starters for the game against Croatia and am yet to make up mind about the remaining two. We are confident that we can beat the Croatians if our fans get behind us like they should, this is not the time to jeer the players before or during the match."
- Sports & Recreation