The 39-year-old Swiss reached the semifinals at Melbourne Park at the start of the year but missed the rest of the season after undergoing a second arthroscopic procedure on his right knee, Reuters reported.
“I’m on the right track,” the 20-time Grand Slam singles champion told German-language magazine Schweizer Illustrierte.
“I’m gradually coming back but I’m going to take my time and don’t want to put any pressure on myself. I will only take part in a tournament when I am 100 percent fit.
“At the moment, it looks like I can make my comeback at the Australian Open in January.”
While he has made significant progress in his recovery he said he is still not at the point where he can train as normal.
“Not yet, more than two hours with the racket are not possible at the moment,” said Federer, who is currently ranked fourth in the world and saw Rafa Nadal equal his Grand Slam haul with a 13th French Open title this month.
“But I’ve been working on my stamina and strength absolutely without pain for a while. There will be no further operations.”
Federer is often asked about his retirement plans but the Swiss said he would keep playing as long as he was enjoying it.
“I have been thinking about ideas for about five years,” he added. “But as long as I am having fun and it’s right for all of us, I’ll keep going.”
Nadal in Paris
Nadal, meanwhile, announced that he will compete in the Paris Masters next month, despite previously saying he might not play again this season.
"It's indoor season time... this picture was earlier today practicing at @rnadalacademy," he posted on Twitter alongside a photo of him training, AFP reported.
"And yes... getting ready for #ParisBercy."
The Paris Masters is scheduled to run from November 2-8.
Any health rules to be implemented for the event due to the coronavirus are yet to be announced.
After the French Open triumph, Nadal said, "I don't know what I'm going to do after Roland Garros.
"I can't tell you if I'm going to play again or not in the next two months."
Nadal has never won the Paris Masters in his career.
Novak Djokovic has decided not to enter the Paris Masters because he has no points to win at the event as he bids to retain the world number one spot come end of season, the 33-year-old Serb said.
“I won’t play in Paris as I can’t add to my points tally but I will go to Vienna and London,” Djokovic told Wednesday’s edition of Belgade daily Sportski Zurnal, Reuters reported.
“I can win up to 500 points in Vienna as I didn’t play there last year and there are also a lot of points available in London.”
Djokovic clinched a record 36th ATP Masters crown when he won the Italian Open title in Rome last month, surpassing Nadal.
“I want to go down in history as the world number one with the most weeks at the top of the ATP Tour and I will do all I can to make it happen,” the Serbian added.