Kauto Star has come through a racecourse gallop at Wincanton to suggest the two-time Gold Cup winner will be fit for Cheltenham next week.
It was feared the 12-year-old would miss the Gold Cup on 16 March after a fall but he has recovered rapidly.
Kauto Star was put through his paces for two miles by regular jockey Ruby Walsh and raced alongside Mon Parrain.
He will now go through a jumping session on Monday before trainer Paul Nicholls makes a final decision.
Before Friday's gallop, Nicholls had told BBC Radio 5 live: "There's huge improvement.
"This time last week I was resigned to the fact he wasn't going to run, but now it is good signs. We're going the right way very quickly. "
Last week Nicholls said Kauto Star was only "50-50" to compete in the race after falling at the stable yard.
Nicholls added: "I just said to Clifford [Baker, the stable's work rider], 'you told me last Wednesday it was 50-50 - how would you put it now?' and he told me, 'nearly 100%'.
"He did normal work today with Big Buck's [another horse from the Nicholls stable] with no ill effects, I'd be surprised if he doesn't work really well tomorrow.
"This sort of injury always goes quickly. It wasn't anything more serious than bruising and he's going the right way."
Kauto Star has become an iconic jump racing figure in a record-breaking career which included an unprecedented fifth King George VI Chase in six years at Kempton on Boxing Day.
The Gold Cup was expected to provide a much-anticipated showdown between the veteran and defending champion Long Run, who is five years his junior.
Since his fall when schooling over small obstacles on 26 February, Kauto Star has been having physiotherapy and an hour's exercise on a horse walker every day.
Nicholls said Kauto Star took "a pretty awful fall" when he broke the news six days after his tumble.
