Nadal's usual pre-Wimbledon preparations involve playing at Queen's Club in London, but due to strict UK tax regulations which the Spaniard claims would see him make a loss from his week at the event, he has been lured to play in Germany.
"The Gerry Weber Open is a fantastic tournament," said the world No. 2.
"I’m very happy that I may finally play in Germany and in front of my German fans again. I really enjoy playing on lawn.
"This part of the season is very, very important for me. Success in Halle would also mean a real shot in the arm for me for Wimbledon and the Olympic Games. But, of course, there is heavy competition."
Federer is a five-time Halle champion, although he has not won the title since 2008. He could meet Nadal in the final next June although both men will face stiff competition from the likes of 2010 Wimbledon finalist Tomas Berdych and Gael Monfils.
If the duo do meet in the Halle final, Federer is likely to be favourite. Nadal won their last grass-court meeting in the 2008 Wimbledon final, but the Halle grass is much faster and lower bouncing than the Centre Court at SW19, which will suit the Swiss Maestro's attacking game.