Video footage showing the former prolific defender and his family being rescued has circulated widely across Argentina and Uruguay, and locals have described the incident as being "a miracle" that it didn't result in tragedy.
Demichelis and his three children (Bastian, Lola, and Emma) on New Year's Eve were reportedly swept away from shore by a powerful current in a stretch of water near the exclusive Uruguayan Atlantic resort of Punta del Este that wasn't patrolled.
According to local reports, off-duty lifeguards who happened to be surfing during their break saved the family. Demichelis' children reportedly attempted to cling to a surfboard as they were hauled back towards land through crashing waves.
Demichelis tried to push the surfboard from behind while his children held on, with additional locals rushing to assist as they approached the beach.
Demichelis entered the water to help his children when he noticed they were struggling, and had a stern word with them afterwards before additional assistance arrived.
Uruguayan journalist Gustavo Descalzi told Argentinian TV programme A la Tarde: "It's a miracle they're alive. "It's not that swimming is banned there, but the nearest lifeguard service is around a kilometre away. The reason I say it's a miracle they're alive is that this incident happened during a lifeguard changeover, and two went to have something to eat and went for a stroll up the beach, and that's when they heard screaming."
The incident has prompted a debate about safety in Uruguay, particularly around those areas where swimming is prohibited.
