Murray said he is aiming to reach 100 percent first, but has set his sights on playing at the Brisbane International and then the Australian Open in the new year.
Murray, 30, has not featured on the tour since Wimbledon, and while he was relatively competitive at the All England Club, he was battling a hip problem throughout.
"Definitely he can move better, he can serve better," was the up-to-date judgment of Federer, who faced Murray in an exhibition match for charity in Glasgow last week and said he has missed him on the tour. "We know all these things. For a start, I think it was quite encouraging and actually OK.
"He still has a lot of time before Australia comes around, but only he knows at what level he wants to return to competition. But I thought he was actually pretty good. I didn't expect him to be this good yet."
Murray, who was practising at the O2 Arena this weekend, last made an attempt to play on the tour at the US Open, which he aborted. He said he is now taking "each week as it comes".
Federer, meanwhile, has become something of an expert on how to manage his fitness, protecting his body so well that he earned the year-end world No. 2 ranking at the age of 36.
But the Swiss knows how delicate a balancing act it is deciding when to play and when to rest, after withdrawing from the Paris Masters two weeks ago and forgoing the chance to beat Rafael Nadal to the season's world No. 1 prize.
"In some ways it was a brave move for Andy to just put himself out there, give it a go [in Glasgow]. Nobody really knew how he was doing," said Federer. "It would have been easy for him to just say, 'You know what, I'll have somebody else play. Tickets are sold out. Roger is coming. I can make somebody else play Roger maybe. It will be still maybe a successful story.'"
The key for Federer, it seems, is to have confidence in any decision he makes. "I don't have any regrets [about pulling out from Paris]," he said. "I feel like in my stage of my competition, my age, either [the world No. 1] comes to me or it doesn't.
"[Nadal] had more, you know, gas left in the tank than I did. I couldn't play as much as I've wanted, or I overplayed anyway.
"I would have loved to be in contention through the Montreal finals, Cincinnati, US Open. But things evaporated very quickly after he won the US Open. That's when he made his final push, in Asia. That was it for me really. In some ways I'm happy he clinched it because he deserves it."