The 22-time Grand Slam champion has not played since his Australian Open title defence ended in a second-round defeat by Mackenzie McDonald, during which he sustained his injury.
Nadal withdrew from hardcourt events in Indian Wells and Miami this month but is set to return to the ATP Tour on his favourite surface having stepped up training in the last week.
"Rafa was the first player to sign up," Monte Carlo tournament director David Massey said in a statement.
"He wants to play in Monaco and is giving himself every chance to be able to participate in this tournament he loves so much, and which he has won 11 times in singles, including a record eight consecutive titles between 2005 and 2012."
Nadal has previously used the April 9-16 Monte Carlo Masters as a key tournament to prepare for the French Open, which he has won 14 times.