Macbook Internal Speaker Option Gone
I just recently has the same issue on my Macbook Pro 13" (late 2011). To fix the problem, I first reset my PRAM, and then my NVRAM. To reset your PRAM, shutdown your computer, press the power button, then immediately hold command-option-p-r until you hear the startup chime. To reset your NVRAM, keep the four buttons pressed in until your computer restarts again and you hear the chime one more time.

At this point, you won't see any difference; the audio will still be grayed out or not in your preferences window. Plug a headset, earbuds, or anything into the audio jack. Take them back out again, and your audio should be back to normal!