The midfielder has not featured for the Gunners since being stripped of the captaincy after his outburst towards fans during the 2-2 draw with Crystal Palace on 28 October (AEDT).
Emery says Xhaka is not in the right frame of mind to feature for the first team, even though he has been dedicated in training this week.
"Not yet," Emery replied when asked if Xhaka would be back in the squad.
"I spoke with him on Tuesday about how he's feeling now and how he is in his mind. He's working well, he's training well, but he said to me that he's not feeling good enough at the moment to play. We are going to wait."
Pierre-Emerick Aubameyang was named Arsenal's new captain and Emery has backed the striker to embrace the role.
"I can remember how we did the process because last year the captains were Laurent Koscielny, Petr Cech, Aaron Ramsey and Nacho Monreal," Emery said. "They left the team, at the last moment as well, Koscielny. In that moment I decided, and also I used the characteristics to find a captain.
"After I started with Granit Xhaka because he has the quality to take the captain's responsibility. Then after the [Palace] issue, I decided it was better for him not to. Next in line is Aubameyang, the second after him is [Hector] Bellerin, third is [Alexandre] Lacazette and the fourth is Mesut Ozil.
"The first is Aubameyang because he has experience and he has the respect in the dressing room. He was the top scorer last year in the Premier League and also I know he needs time to take that responsibility 100 per cent. But we are going to support him.
"Every player, we are going to support the four captains, and we are going to support him as our first captain because he has also made one extra step to achieve that responsibility.
"For example, Sokratis [Papastathopoulos] said everybody can take responsibility as a captain. We want to be a strong family here and I know for the supporters it is very important who is the first face, in front, with the captain's responsibility. I decided to give it to Auba and everybody also agreed with that decision and now I am telling you he needs time to take that responsibility with confidence, but we give him that confidence, I give him that confidence. He has the quality and the values to do perfectly with that responsibility."
Emery's own position is under scrutiny following a run of one win in six games in all competitions, while Leicester are six points above them in the Premier League table.
While he insists he has not spoken to the board about his future, Emery believes off-field problems - such as the issue around Xhaka and the attempted armed robbery of Sead Kolasinac and Ozil in July - have complicated the Gunners' situation.
"We need to improve and also we are in one process," he said. "First we are speaking about the captain's circumstances, then also some circumstances with some players, with Sead Kolasinac and with Mesut Ozil, then also circumstances that didn't help us with Granit Xhaka. For example, we're losing one player at the moment, Granit Xhaka, who is important for us and the way we play, but I have confidence in the players and in our work.
"I know we are in one process and we are speaking with the club about the responsibility of the club, and they are supporting us, and the players are supporting me. We know we are taking one responsibility with the young players, but the young players need one process to achieve that responsibility and their performance in the team, but we are helping them."