"Hopefully I'll show an acceptable level. I have to go step by step," said Nadal who has not played in an ATP tournament in South America since 2005.
"Things won't be the same as last year when I was okay. I'll have to be patient," he told a news conference at the coastal city of Vina del Mar.
"I have to start from a modest position. I need to gain competition rhythm as soon as possible and I hope this tournament helps me get there.
"I'll do all I can to go as far as possible but the outcome at this tournament is the least important thing. I came here to compete because I've been off the court for a very long time."
French Open champion Nadal has slipped to fifth in the rankings but he said that trying to regain the number one position was the last thing on his mind.
"After seven months out I'm not in a position to think about that," said the 11-times grand slam singles winner. "I'll try to play better week after week."
Nadal's planned return at the end of last year was delayed due to illness and he is scheduled to play on his favourite clay surface at three Latin American events this month.
After the Chile tournament he will compete at the Brazil Open in Sao Paulo the following week and the Mexico Open in Acapulco from Feb. 25.
Nadal returns on Tuesday in the doubles alongside Argentine Juan Monaco. A day later he will play a second-round singles tie against Argentine Guido Pella or a qualifier.
"The time of recuperation has been good and it's good to come back on clay. I'm happy to be here and my idea is to enjoy the week and see what happens," said Nadal.