"It's of course always a hard situation and we will have to manage this situation with Riyad", Puel said.
The Algeria global was identified as the ideal replacement for injured Leroy Sane but Manchester City failed in attempt to land him due to a reported £80 price-tag determined by his club Leicester City.
The former England worldwide went on the say that he believed Mahrez would definitely have started for City had the move gone through, especially considering their current injuries.
Leicester boss Claude Puel has promised Mahrez a welcome return to the squad.
"He would have made [Manchester] City better and stronger", Murphy said, "I think with the injuries they've got he'd have gone straight in [to the team]". 'I hope for Riyad he can clear his head and he can come back with us because he's a valuable player for us, crucial in our play.
"Riyad is not available for this game". After the transfer window, it is a tough decision for us to manage now. Like professionals, we have to keep our focus.
What makes the failed deal even worse for Mahrez is that there was some confusion between the two clubs in negotiating.
Almost two years have passed since Mahrez helped the Foxes win the Premier League title and so you can understand why he's so upset.
Mahrez joined Leicester for just £350,000 (Sh50 million) from French side Le Havre in 2014.
"It is time to talk to Riyad, we have a good relationship and we need to manage the situation", said Puel.
But according to The Sun, the Foxes are privately furious with their angst-ridden Algerian star and "have taken legal advice on how they now try and reintegrate their £95million-rated asset back into their squad".
"After, we will see with Riyad when he can come back with us".
The Algeria global handed in a transfer request in a bid to force through a transfer, sources said, and he was left out of the squad for Wednesday's defeat at Everton.