Plans for a new outdoor stadium were scrapped by the West Australian government in February, with premier Colin Barnett citing the global financial crisis.
The alternative, to redevelop Subiaco Oval, was also shelved for at least two years, but Demetriou said the AFL was still working with the key stakeholders to get the issue back on the agenda.
"It's very important to kick-start the momentum again about the stadium," Demetriou said on Tuesday from Perth.
"It's important for this state, it's important for football followers and anyone who attends that ground.
"I understand that it's been parked by the government, which is understandable given what's going on around the world, these are difficult and uncertain times.
"But we have to keep working on that issue, because at the moment everyone acknowledges that the Subiaco stadium is probably the least adequate of all of our grounds around Australia (with) the smallest capacity.
"Everyone understands that and we need to keep working on it."
WA was set for an $850 million, world-class stadium with a capacity of 60,000 before the global financial crisis forced the state government to tighten spending.
Demetriou said Subiaco's current capacity was denying people the chance to go to the football, and that problem would only increase with the WA teams' improvement over the coming years.
"We’ll all be sitting here in a couple of years talking about Fremantle being a real contender for the finals given their young list and you'll be saying the stadium's not big enough," he said.
"They'll be selling out their games because they'll be exciting with some of their young players.
"It's a cyclical thing. All clubs go up and down, but this club is on the march, and it's got a very young list.
"If people are patient, they'll be a real contender at a point in time.
"When that happens you'll be turning people away."
