They are 11 points clear of Atletico Madrid, who hosted Celta Vigo late last night.
The France attacker impressed amid claims of him struggling to win over senior teammates and coach Ernesto Valverde.
Titleholders Madrid stayed within 15 points of Barca following their hard-fought 2-1 win at Eibar thanks to Cristiano Ronaldo's brace. "While it's still mathematically possible, you can't rule anyone out".
"I don't discount them - and they would do well not to discount themselves either".
Dembele struck up an excellent partnership with new Arsenal striker Pierre-Emerick Aubameyang at Borussia Dortmund last season and the Gunners are said to be keen on reuniting the duo. Dembele was a constant threat to Malaga down the right-hand side and he set up Philippe Coutinho's sumptuous second goal, toying with a defender before laying the ball on for the Brazilian to score with a backheel.
"Of course there's a title race", Valverde told reporters after Barca preserved their unbeaten record. "The move was flawless".
The 20-year-old winger was an unused substitute in Barcelona's Champions League first leg 1-1 draw against Chelsea.
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Dembele's individual highlights proved popular amongst Barca supporters on Twitter - it was surely his best game in a Barcelona shirt.
"Today, things went his way more than in other games but the good thing about him is that he always wants to take on opponents", said Barca coach Valverde.
Midfielder Ivan Rakitic said Dembele had the backing of the squad and that they had never doubted his quality.
"We know he's just come back from a serious injury, especially for the type of player he is. We need players like him, who show face, have pace and can pull away from their marker like he did for the second goal".
Dembele, whose first season in Spain has been ruined by injury, was the provider for Coutinho's goal approaching the half-hour mark after Suarez opened the scoring 13 minutes earlier.
"It's one more step for him, he helped us a lot and he has a long journey ahead of him at Barca".