The decision came after fellow runner Jordan Hasay, who would have replaced Grunewald on the team, withdrew her protest of the original results.
"I've got nothing but love for @JordanHasay," Grunewald said on her Twitter account. "She is a shining light of sportsmanship and integrity in track and field."
Grunewald, a cancer survivor, had easily won the race on Saturday at Albuquerque, New Mexico, but after a series of protests and appeals had been disqualified for impeding Hasay late in the race.
The controversial decision produced a storm of protest on social media and led to a number of contestants in the women's 1,500 metres on Sunday locking arms after the race and walking down the track in support of Grunewald.
"Thrilled to see news of my reinstatement," Grunewald said.
"I hope this unfortunate situation can be avoided in the future."
She added in a statement to Reuters: "This was never an issue between myself and Jordan, it was more an issue with the process and the steps that were taken to get to where we did.
"For the first time I get to represent the United States at a major championship and I couldn't be more excited."
She will be joined by runner-up Shannon Rowbury in the 3,000 metres at the March 7-9 world championships in Sopot, Poland.
The top two finishers in each US trials event qualify for the world championships provided they have the qualifying standard.
Hasay had finished fourth in the final but was eligible for the US team with Grunewald disqualified because she had met the qualifying standard and the third place finisher had not.
"Since Saturday evening my emotions have ranged from despair to determination to go to Poland and represent my country as best I can," Hasay said.
"After much thought and consideration, however, I have decided to withdraw my protest as I do not want to make a national team under these circumstances."
USATF chief executive Max Siegel announced Grunewald's reinstatement after speaking with Paul Doyle, Grunewald's agent, and Alberto Salazar, Hasay's coach, who had filed the initial protest and subsequent appeals.
Siegel said USA Track and Field "will address our processes to try to minimize the potential for controversy or misunderstanding in the future".
Salazar made clear Hasay felt withdrawal was the right thing to do and with the agreement of all parties Grunewald was reinstated, USATF said.
"My intention was what every coach wants - to advocate for my athlete," said Salazar, who also coaches British double Olympic champion Mo Farah and Americans Galen Rupp and Mary Cain.
"It was a physical race and when I saw the contact and the flag go up, I filed a protest.
"I appreciate Max's involvement and wish nothing but the best for Gabe and Shannon in Sopot."
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