The 36-year-old was successful in retaining his Australian Open crown after defeating Marin Cilic in a five-set thriller. The final scoreline was 6-2, 6-7 (5-7), 6-3, 3-6, 6-1 in the Swiss tennis star's favour.
Nadal heaped praise on Federer and admitted the pair share a "good relationship" that has made them appreciate each other's achievements.
"It's admirable now as much as before, we do not figure now what he is and what he did," Nadal was quoted as saying by tennisworldusa.org.
"I admire him a lot. We have a good relationship, we fight for important things, but you shouldn't forget that this is a sport and the moments we lived together made us appreciate each other."
Federer's success in Australia saw him clinch his 20th Grand Slam title. Even before the start of the first Grand Slam of the calendar year, he held the record for most number of Grand Slam title in the Men's Singles division.
Following his success in Melbourne, Federer has only further extended his record and is now four Grand Slam titles ahead of Nadal. Novak Djokovic is currently fourth in the list with 12 titles to his name.
The 31-year-old Spaniard claims it will be difficult for the next generation to replicate what the trio achieved in the past, especially considering the fact that Federer and Nadal are still able to win Grand Slam titles even in their 30s.
"There was a generation able to win a lot, Federer, me, (Novak) Djokovic, (Andy) Murray, (Stan) Wawrinka. If we look at our sport's history, it had never happened that three players would win much for a lot of years.
"(Alexander) Zverev, (Nick) Kyrgios, (Denis) Shapovalov are very strong and they will definitely win several Slams, it will depend on how much they are willing to improve and breakthrough. Their potential and talent is big."
Nadal was forced to withdraw from the quarter-final clash of the Australian Open due to a hip injury. He has now set his sights on returning for the 2018 Mexican Open that will kickstart on 26 February.
"I want to play well in Acapulco and get there fresh, then Indian Wells and Miami. My big goal is to be the best clay-court player again," he stressed.