The sophomore, who transferred from USC this summer, had applied for a medical hardship waiver in an attempt to play immediately. Isaac, a Chicago-area native, said he was returning to the Midwest to be closer to his mother, who was recovering from hearing loss surgery.
The NCAA denied his initial request to skip the mandatory one-year waiting period for transfer players in late August.
Isaac ran for 236 yards and two touchdowns on 40 carries during his freshman year with the Trojans. The Wolverines had hoped he would be a part of the running back rotation in Ann Arbor this season.
Hoke said Isaac has been a productive member of the team while working with the scout team this fall.
"He's handled it great," Hoke said. "He had a great day yesterday. From an attitude standpoint and everything else, he's been awesome."
Isaac will have three years of eligibility remaining when he is allowed to get back on the field in 2015. He likely will be competing for touches with current sophomores Derrick Green and De'Veon Smith next fall.