The simplest thing is of course "Hablo español." I will give you some other idiomatic formulations.
You are in the Home Depot and a monolingual Spanish speaker is having trouble getting assistance from a monolingual English speaking clerk. You can tell the customer he can talk in Spanish with you:
- Me puede hablar en español, a ver si puedo ayudar en algo.
If a colleague of yours is unsure whether it's okay to talk to you in Spanish, you can encourage him like this:
- Manejo [bien] el español, dígame.
Your study group is meeting and one of the members is new. He is struggling to try to talk to you in English, because he thinks you won't understand Spanish. You can reassure him:
- Domino el español. No hace falta que me hables en inglés. Pero oye, qué bien que hablas inglés, hombre.
"Dominar" is a stronger word -- you have mastered Spanish; wherease "manejo" is more like "I get by in Spanish."
In certain contexts in an English-speaking environment, one might say "Soy bilingüe," or one might jump to an explanation such as "Mi papá es español," "Tengo familia en México," "Mi esposo es gallego," etc. Such an explanation can put the other person at ease.