McHale took a leave of absence on Nov. 10 to be with his family as his daughter's health worsened. Alexandra "Sasha" McHale died Nov. 24 of complications from Lupus. She was 23.
"It's been a while," he said. "Hopefully it's the right time. I don't know there ever is a right time. I don't know if there is a playbook about this, but I'm excited to be back."
McHale will coach the Rockets on Saturday night against the Mavericks.
Houston went 7-6 under interim coach Kelvin Sampson while McHale was out.
McHale said he spoke with Sampson daily, watched each game and tried to stay plugged into the team as much as he could while he was away.
"It was hard. I don't want to get into the whole thing, but it was hard because your mind is a million miles away, but yet you're still watching games and you're still pulling for the guys so hard and you want them to win," he said. "A lot of times that hour of the day (talking to Sampson) was sometimes the best part of the day."
The second-year coach and Hall of Fame player complimented the job Sampson and the rest of the staff did while he was out. He said he felt bad that he had to leave this young team, which was trying to fit new pieces together, just when the season was starting.
"There just was a ton of adjustments to be made, and I thought they did a really good job of making adjustments," he said of his coaching staff.
McHale never directly addressed his daughter, but he did note that he appreciated the support he received from various people around the league during this difficult time.
"I've heard from a lot of people (and) that's been tremendous," he said. "I had a lot of guys that I didn't know that well that really reached out, and I spent a lot of time talking to them. It's a terrible situation ... it's incomprehensible. But it meant a lot."
The Rockets are paying tribute to McHale's daughter by wearing a green and purple band on their jerseys and a patch of the same color with her initials on their warm-up shirts. Green was her favorite color, and purple is the color that represents the fight against Lupus.