Matsui had 15 simulated at-bats on Sunday in Tampa, Fla., getting his early work in after playing in three games for the Class A Tampa Yankees.
With his left knee showing no signs of swelling, the Yankees are optimistic that Matsui -- out since June 22 with inflammation -- may be able to rejoin the big league club as it opens a six-game road trip on Tuesday at Toronto.
"It's a big bat to get back in the lineup," Yankees manager Joe Girardi said. "Hideki has obviously been an integral part of this lineup the last four or five years. He'll be a welcome addition."
Matsui had 11 at-bats against right-handed pitching on Sunday and four against left-handers. He has logged eight total at-bats in game action for Tampa, stroking two hits -- including a home run -- and walking twice.
The 34-year-old aggravated his left knee while playing the outfield during the Yankees' June 13-15 Interleague series at Houston -- a costly trip for the club, which likely lost right-handed pitcher Chien-Ming Wang for the season to injury while sweeping the Astros.
After the injury, Matsui appeared in four more games as a designated hitter before shutting himself down. He has tried multiple times to return to the lineup, only to experience a setback.
"Every time he got to just BP, it seemed to swell up," Girardi said. "It has not happened this time. He's been pretty healthy, and he's running well. We're encouraged by it."
Girardi said that the Yankees would use Matsui only as a designated hitter for the rest of the season, trying to ward off a recurrence of the inflammation. New York would then shuffle its defensive alignment by shifting Johnny Damon back into the outfield.
Matsui is batting .323 with seven home runs and 34 RBIs in 69 games for New York this season. He had been especially productive with runners in scoring position, batting .338 (22-for-65) in an area where the Yankees have struggled to find success of late.
"Anytime you get someone that's had so much success like Hideki Matsui or Jorge Posada, it's a welcome addition back," Girardi said. "Obviously, the important thing is that we just keep him healthy."
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.