Nadal, who has never won the ATP Finals despite his trophy-laden career, dethroned Djokovic from the top of the rankings this week.
The 33-year-old said he was happy to be in London after being forced to pull out of Paris but admitted he was not serving at full tilt.
“I need to see how things evolve every single day,” he said. “I have good hopes to be 100 percent ready for Monday.”
The Spanish top seed said he had only started practising his serving on Thursday and it had been “very slow”.
“For me the main goal is to be healthy for Monday more than to have a huge amount of services,” he added.
Nadal, who won the French Open and US Open this year, said he had been happy with his form before his injury.
“I’m confident that I can be very competitive but of course it’s a tournament that you will face the top guys from the beginning so you need to be 100 percent ready.
“I really hope that I will be able to serve every single day better.”
Nadal’s opponents in the Andre Agassi group are Daniil Medvedev, Stefanos Tsitsipas and Alexander Zverev.
His first match is on Monday against defending champion Zverev.
The Bjorn Bjorg group features Djokovic, Roger Federer, Dominic Thiem and Matteo Berrettini.
The season-ending event, featuring the year’s best eight players, is contested in a round-robin format with the best four players and doubles teams reaching the knockout semi-finals stage.
