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Togo were banned for two Afcon editions after pulling out of the recent tournament in Angola after two members of the squad were killed in an attack.
CAF believed the decision to withdraw came from the government.
The move sparked protests in Togo and elsewhere across Africa.
Togo's case had been due to be heard by the Court of Arbitration for Sport (CAS) in Switzerland. But that process has now been put on hold, with talks between the two parties due to be held on May 7th.
The arbitration procedure has been suspended considering that the parties wish to solve the dispute by mediation," CAS said in a statement.
CAF said that Blatter would lead the talks.
The attack on Togo's team convoy took place as they travelled to their base in the northern Angolan enclave of Cabinda.
Two members of the party died and one was seriously injured and after several days of confusion the team was called home to take part in national mourning.
The attack was claimed by the Front for the Liberation of the Enclave of Cabinda (Flec).
