Murray has not played singles tennis on the ATP Tour since the Australian Open in January, where he suggested he could retire this year amid continued struggles with a hip injury.
But after undergoing hip resurfacing surgery, the Briton has since successfully taken to playing doubles and is now in line to play alone at the Cincinnati Masters next week.
He faces a tough draw, potentially facing Dominic Thiem in the second round, but Nadal, who is also in the same half of the draw, is delighted for Murray and for the sport.
"It's good news for the sport, and especially great news for him," Nadal said. "That means that he's healthy.
"That's going to be a big, big moment for him. After all the retirement that he predicted in Australia, six months later it seems like he's back again, healthy, competing well.
"That's going to be a big thing for him. I'm happy."
Nadal was speaking after rallying past Fabio Fognini 2-6 6-1 6-2 into the Rogers Cup semi-finals, but he brushed off suggestions this was the best form of his historic career.
"No, I am not better than ever before. I am how I am today," he said. "I'm having a good season more or less, being competitive almost in every single event that I have been playing.
"Of course, I had some physical issues the first three, four months of the season.
"But I have been playing solid, I played the final in Australia, then semi-finals in Indian Wells, then three semi-finals on clay, two titles, semi-finals at Wimbledon.
"So I have been solid, and semi-finals here now. I'm happy with the way that I am competing and enjoying."