Simply put, he is a Guardian Force in Final Fantasy VIII. To be more complicated, he is a demon in his own dimension, trapped in a magical lamp given to Squall by Headmaster Cid before their first mission as SeeD.
To get him join the party, you have to use the Magical Lamp and fight him. I would encourage you to fight him early on because he has some useful abilities like Mug and Time Magic refinement.
Simply put, he is a Guardian Force in Final Fantasy VIII. To be more complicated, he is a demon in his own dimension, trapped in a magical lamp given to Squall by Headmaster Cid before their first mission as SeeD.