In an interview with Golf & Turismo, the Northern Irishman suggested we could see Woods return before the end of the year - possibly at the Hero World Challenge at the start of December.
The annual event forms part of the PGA Tour schedule, and is hosted by Woods every year. It features an 18-man field consisting of the most recent winners of the four major PGA tournaments, the top 11 available players from the Official World Golf Ranking, the defending champion, and two special exemption players selected by the foundation.
Woods has not played since missing the cut in the 150th Open Championship at St Andrews in July.
"Tiger overall is fine. He is still working hard on his rehabilitation. The road is long but improving day by day," McIlroy said.
"After the Open Championship he had to take a break, but I think he can be back by the end of the year, maybe at the Hero World Challenge."
While Woods has not played since St Andrews, he has been spotted on the course numerous times, including at Pebble Beach not too long ago.
McIlroy was also asked about Woods' son Charlie, who despite still being only 13 years old, already has some touting him as a potential future star.
Back in September, Woods was seen caddying for his son at a 36-hole qualifier for the Notah Begay III Junior Golf National Championship.
The 13-year-old carded a four-under 68 Sunday, the lowest score of his career.
Asked if he's played a round with Charlie, McIlroy replied: "No, but I have practiced with him a couple of times and I can say it is impressive to see him swing and think he is only 13 years old."
"The important thing, however, is that he maintains his light-heartedness and the right spirit. He must continue to play for pure fun without being overwhelmed by the many pressures that, inevitably, will come as the son of a phenomenon like his father. But Tiger is very careful about this and is preserving it in the best way."
Aside from the Hero World Challenge, we could also see Woods return at the PNC Championship on the 17th-18th December alongside his son Charlie, after the father-son duo also took part in the event last year.