Depending on the sub floor type it may or may not ever "go down" again.
If it is a strand board or a chip board, once it gets wet and swells that's it "all over red rover". It will need replacing to make a flat surface again.
Sometimes with ply sub floors you might strike it lucky, tho again usually once the boards swell the glues used to construct the boards are destroyed and alas the swelling remains.
I'm not so sure I'd be too worried about a 1" x 1" area as long as you have FIXED the water problem, any gap could easily be filled with tile cement when you retile, or just fix the 1" x 1" area with a new tile.
