The spin dynamics of magnetic impurities is shown to play a crucial role in mesoscopic effects. It follows from this analysis that the quantum magnetoconductance oscillations in a mesoscopic ring of a diluted magnetic alloy are gradually suppressed in the paramagnetic regime, whereas a strong magnetic field forbids spin-flip processes and restores the mesoscopic Aharonov-Bohm oscillations with an amplitude limited by the efficiency of electron escape to the bulk. This effect is examined analytically using a model of a quasi one-dimensional ring joined to the electrodes by tunnelling contacts or short leads.