The Barcelona midfielder appeared to stamp on Pepe's head during Real's 4-3 loss to their La Liga rivals on March 23.
Busquets denied the claim despite replays showing otherwise, and Alonso said Real would stand by Pepe.
"Pepe has expressed how he feels and we are with him 100 per cent," Alonso told reporters.
"People would have talked about it a lot if it were the other way around. He is a key player for us."
Alonso was asked whether he would prefer for Real to win La Liga or the UEFA Champions League this season.
The former Liverpool man said his team needed to aim to win both.
Real sit three points behind league leaders Atletico Madrid with seven matches remaining and look set for a semi-final place in the Champions League after thrashing Borussia Dortmund 3-0 in their first leg.
"Both are very difficult to win, it's not easy to choose. The Champions League has a special glamour to it and it is a long time since we last won it," Alonso said.
"It's not a question of choosing, we need to fight for both.
"In the league we are doing better compared to last year, it's not a question of comparing though.
"We have six very important weeks of the season remaining with decisive matches. It's coming up to crunch time."
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