Chelsea striker Costa was involved in a training-ground spat with manager Conte in early January.
The disagreement saw Costa withdraw from the team that went to and beat Leicester and he was offered a move to China in the transfer window.
Costa is thought to have been offered a £30million-a-year deal to quit Stamford Bridge.
Antonio Conte's hilarious reaction as Simon Mignolet saves Diego Costa penalty
Wed, February 1, 2017
Antonio Conte found it difficult to hide his emotions after Simon Mignolet saved Diego Costa's penalty during Chelsea's 1-1 draw with Liverpool at Anfield
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Antonio Conte couldn't hide his emotions after Diego Costa's penalty miss
Now everything is perfect
Conte on Costa
But Conte resolved the situation with his star striker, who has returned to top form in recent weeks.
“Now everything is perfect.”
Conte was in Italy last night to watch Juventus beat Inter Milan in Turin.
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Antonio Conte (right) says 'everything is perfect' now with Diego Costa
Conte and Costa had a falling out last month
Conte is a hands-on manager in Chelsea training
His Chelsea side are nine points clear at the top of the Premier League and beat Arsenal 3-1 on Saturday.
Eden Hazard scored the goal of the game, charging from the halfway line and taking on there defenders before shooting past Petr Cech.
“He has incredible talent and really balances the phases of the game,” Conte added.