The three-time Grand Slam champion hasn't played since Wimbledon in July after surgery and pulled out of an exhibition event in Abu Dhabi late last month, casting doubt on whether he would be ready.
He admitted it had been a race against time, but said he was confident enough to take the court next week against first-round opponent Ricardas Berankis.
"For me, I think the fact that I'm here and I'm going to play the first one, it's a big victory," he said after a week of intense practice in Melbourne against Rafael Nadal, Novak Djokovic and others.
"That's something really good from my side, especially from the knee."
The Swiss star, who has dropped down the rankings to be seeded nine at the season-opening Grand Slam, said the injury "is getting way better", but there was still pain.
"It depends on the way I'm moving, what I'm doing. But it's normal," he said, adding that he was in regular touch with his doctor in Switzerland.
"I know I need to start somewhere. I think here was a good start, to get pushed, to see also mentally how I'm going to react, how I'm going to feel when I'm going to be playing matches."
After surgery in August, Wawrinka, 32, said he spent eight weeks on crutches, with the injury also taking a mental toll.
A final decision to compete was only made Saturday in welcome news for tournament organisers, with five-times runner-up Andy Murray and Japan's Kei Nishikori already ruled out with injuries.
And in an admission that he may not go far, he said he didn't win many sets in his practice routines against some of the top names in the game.
"I practised with Rafa, I practised with Novak, with (Tomas) Berdych, with (Gael) Monfils, with (Grigor) Dimitrov," said the popular star, nicknamed "Stanimal".
"I didn't win many sets, but that's not the most important. I did way more hours in one week that I've done the last few months, and against a way better level of intensity.
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