Shiffrin suffered a knee injury during a downhill race at Cortina d'Ampezzo and during her absence was overtaken atop the overall World Cup standings by Swiss skier Lara Gut-Behrami and currently sits in third position, 385 points back.
This weekend in Are, Sweden, which is the penultimate World Cup stop of the season, Shiffrin will not compete in Saturday's giant slalom and instead focus on Sunday's slalom, which is her trademark event.
"We had to come to terms with pretty quickly the fact that the overall (title) was going to be very much of a stretch," Shiffrin, who has seven World Cup race wins this season and a record 95 in her career, told reporters during a video call.
"As an athlete I would love to fight for the overall but I also just kind of need to admit where I am this season and that's not a possibility."
Shiffrin was airlifted away following her high-speed crash in January that occurred on the same piste that will be home to the women's downhill at the Milan-Cortina 2026 Olympics.
During her layoff, Shiffrin was managing a medial collateral ligament sprain, a sprain of the tibial-fibular ligaments, as well as a bone bruise from earlier in the season.
The American said her decision to sit out the this weekend's giant slalom was mainly due to a lack of high-quality training.
According to Shiffrin, she has been "symptom limited" and therefore has had only three slalom training sessions during her recovery that were "remotely close to normal".
"We've had pretty clear medical criteria, boxes that I have to check along the way with this injury," said Shiffrin. "And at any point if I wasn't hitting these marks then we just had to delay the process.
"And so that kind of moved us into the territory of the last week where I've actually finally been able to get into a slalom course that had combinations, a little bit more length to it, a little bit more intensity.
"Yesterday, I would say was my first session where I had what I would say race-intensity skiing."
Shiffrin also said she will not compete in the super-G and downhill events at the March 22-23 World Cup Finals at Saalbach in Austria.
