Faivre completed a £12.8m move from Lyon in the summer, before he immediately returned to France to join Lorient on a temporary deal.
The 25-year-old, who spent the second half of last season with the French club, has gone on to make 17 appearances in Ligue 1 this season, scoring five goals and providing one assist.
While Faivre was set to spend the whole season with Lorient, Bournemouth have confirmed that have exercised their option to recall him from his loan spell.
In a statement, Bournemouth said: "He will wear the number eight shirt and will join his Cherries teammates in training ahead of Thursday's trip to West Ham."
Faivre is comfortable playing on either flank or as an attacking midfielder, and Iraola believes his versatility will be useful to the Cherries.
"I think Romain is someone that can help us in different positions," Iraola told reporters ahead of Thursday's clash with West Ham United.
"He is a player who has played inside as a number 10. He can play outside, coming inside onto his strong foot.
"I think he will help us, especially with the players we have lost in these eight or 10 positions. Now with the departure of David Brooks, I think it was quite an easy decision for the club."
Faivre is set to go straight into the matchday squad for the trip to the London Stadium, where he will hope to make his debut for the South Coast club.
The Frenchman will be joined in the squad by right-back Adam Smith, who has returned to training following a three-game injury absence.
Philip Billing is also available for selection after missing the FA Cup win over Swansea, but Iraola is unable to call upon James Hill, Ryan Fredericks and Max Aarons.
Thursday's contest will come too soon for Burkino Faso international Dango Ouattara, who is travelling back from the Africa Cup of Nations following his country's last-16 exit.
The Cherries head into the midweek fixture in 13th position, having picked up 25 points from their 20 Premier League matches,