"He's ready to start, I just like the rotations today," Pacers coach Jim O'Brien said, adding that Granger will likely start when the Pacers return home Wednesday to play Portland.
Granger had been out since Feb. 18 with a partially torn tendon in his right foot. He is averaging 25 points and 5.0 rebounds. He practiced Thursday and had hoped to play in Friday's 101-87 loss at Atlanta but was not ready.
O'Brien said Granger will play limited minutes until his conditioning improves.
"We do not want to play him for extended minutes at a time," O'Brien said. "You won't see him on the court for a whole quarter."
The Pacers entered Sunday's contest two games out of the final playoff spot in the East. They went 6-5 without Granger, their leading scorer.
His return didn't help Indiana in Toronto on Sunday, however, as the Raptors ended a seven-game losing streak with a 110-87 victory over the Pacers. In 19 minutes he shot 3-for-11 and scored 10 points with three rebounds, one steal and two turnovers.
Information from The Associated Press was used in this report.