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.