The Spanish ace has been out injured since making an early exit in Melbourne earlier this year but his uncle is confident that he will be back for the first major of 2024.
Toni told Spanish radio station Onda Cero: "I believe that it will come at the Australian Open.
"Obviously my nephew intends to be cautious, which is what he has to do. Every day he is getting a little better. It is true that it has been a very long injury, but hey, it is what it is.
"It is a high-level sport; in the end it is almost obligatory to play with pain, unfortunately, because you push your body to the limit.
"Pushing it to the limit is what makes you have all these problems."
Nadal has seen Novak Djokovic surpass his haul of 22 Grand Slams this year and Toni knows it will be a tough ask for the legend to add to his major tally.
He explained: "He is aware that the situation is complicated.
"Let's say he manages to get to Australia; it will not be easy to compete again with an added problem.
"He will not be seeded, so he could face a high-level player. When Rafa plays a Grand Slam, he is usually given an affordable opponent to give him momentum, allowing him to be a dangerous threat from the quarter-finals onwards."