Salamanders are able to regenerate their entire limbs throughout lifespan, through a process that involves significant modulation of cellular plasticity. Limb regeneration is accompanied by the endogenous induction of cellular senescence, a state of irreversible cell cycle arrest associated with profound non‐cell‐autonomous consequences. While traditionally associated with detrimental physiological effects, here, we show that senescent cells can enhance newt limb regeneration. Through a lineage tracing approach, we demonstrate that exogenously derived senescent cells promote dedifferentiation of mature muscle tissue to generate regenerative progenitors. In a paradigm of newt myotube dedifferentiation, we uncover that senescent cells promote myotube cell cycle re‐entry and reversal of muscle identity via secreted factors. Transcriptomic profiling and loss of function approaches identify the FGF‐ERK signalling axis as a critical mediator of senescence‐induced muscle dedifferentiation. While chronic senescence constrains muscle regeneration in physiological mammalian contexts, we thus highlight a beneficial role for cellular senescence as an important modulator of dedifferentiation, a key mechanism for regeneration of complex structures.