We study the magnetic susceptibility in the normal state of Sr$_2$RuO$_4$ using dynamical mean-field theory including dynamical vertex corrections. Besides the well known incommensurate response, our calculations yield quasi-local spin fluctuations which are broad in momentum and centered around the $Gamma$ point, in agreement with recent inelastic neutron scattering experiments [P. Steffens, et al., Phys. Rev. Lett. 122, 047004 (2019)]. We show that these quasi-local fluctuations are controlled by the Hunds coupling and account for the dominant contribution to the momentum-integrated response. While all orbitals contribute equally to the incommensurate response, the enhanced $Gamma$ point response originates from the planar xy orbital.
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