Roger Federer and Novak Djokovic believe Rafael Nadal will once again pose a serious threat at Australian Open 2016.

Nadal overcame a series of injuries to finish the season ranked fifth in the world and qualify for the season ending ATP World Tour Finals.

He was defeated by eventual winner Novak Djokovic in the semi-final.

But Djokovic says Nadal should not be written off.

"It's a fact that he's been playing better and he's been raising his level ever since U.S. Open," Djokovic said.

"You can feel that he's starting to get comfortable on the court, starting to play better.

"The couple of matches, first couple of matches he played here against Wawrinka and Murray showed that, showed that he feels more confident, shows that he's starting to miss less, serve efficiently, use his forehand much better."

Roger Federer echoed the world No.1's sentiments.

"Maybe for his standard it's not the best season. What is he going to finish, top five? It's still a good season," Federer said.

"Everybody would take that except maybe a few players at this tournament. The rest would all love to be in his shoes.

"I think he's going to get stronger. With some time to practice and reassess his game, he's going to be tough to beat in Australia. I believe that."