Woods' bid to overhaul the record 18 major titles won by the legendary "Golden Bear" has stalled since 2008, beset by personal problems and more recently a troubling back injury that even he has admitted could finish his time as a top player.
Woods, who is 40 at the end of December, gave a decidedly downbeat assessment of his future Tuesday, saying he had "nothing to look forward to." However, Nicklaus told CNN that his fellow American could still challenge in golf's top tournaments, including the four majors held each year -- of which he has won 14 since 1997.
"He has always been a very focused young man with a great work ethic, and is tremendously talented. To count him out of that (the majors record) would be foolish, he certainly has a very good chance of doing that," the 75-year-old said.
Woods holds the record of 683 weeks at No. 1 in the world rankings, but has slipped to an all-time low of 400 after a dismal year which has ended with back surgeries and no timescale set for his return to the PGA Tour.
While he has struggled, a new star has emerged from the United States -- Jordan Spieth. The 22-year-old Texan won two majors in 2015, came close in the other two, beat Woods' PGA Tour
record for prize money in a season, and is now No. 1 in the world.
Spieth also believes that Woods can return to challenge him and the likes of Rory McIllroy and Jason Day, who have formed an exciting rivalry.
"There's nobody that had more influence in my golf game than Tiger," he told reporters ahead of Woods' World Challenge charity tournament in the Bahamas this week.
"He still has a lot of good years ahead of him in my mind, but now he's really sitting back and saying 'You know if it takes that long...' He's got it figured out -- obviously it's frustrating for him, but we haven't seen the end of him."
Nicklaus, who won three of his major titles after turning 40, revealed he tried to help Woods as far back as 2008 when he battled a torn knee ligament, which was the cause of his original injury concerns.
"I said to Tiger no one wants to see their records broken, but I would want you to be healthy. I've tried to help him with some of the people who helped me in my career," Nicklaus told CNN.
"I hate to see anyone's career to end because of their health. I was fortunate to end mine on my terms not my body's terms, so I would wish Tiger the same."
Encouraged by the rise of Spieth, McIlroy and a crop of exciting young American golfers like Justin Thomas, Nicklaus said he is "tremendously excited" for the future of the game but believes Woods needs to be fully fit physically to match them.
"If you are injured you can't prepare properly for tournaments, and if you don't prepare you won't be able to compete in modern sports because the standards are so high," he said.
Nicklaus stayed at the top of golf's pyramid for over 25 years, famously winning his final major, the Masters in 1986, at the age of 46, so time is still on Woods' side in his opinion.
"I fully expect Tiger to return to come back to play well and be a good competitive force in the game, but it does make me sad to see Tiger or any of our athletes struggle with health. I think Tiger has struggled a lot with his health of late, and nobody likes that," he said.
Spieth also has that message for his erstwhile hero. "You just hope he gets healthy," he said ahead of his title defense at the World Challenge.
Woods has won the tournament five times, but there was no chance of him lining up this week after undergoing a third back surgery last month.
He admitted he is unable to bend over to pick up a ball, let alone swing a club. "I walk. And I walk. ... I'm just walking, and that's it," he told reporters.
His last tournament performance was in August, a season's best tied 10th at the Wyndham Championship, but his fellow professionals are willing him to return to the circuit.
"We don't want Tiger checking out of the game anytime soon," said 2013 Masters winner Adam Scott of Australia.
For the moment, a date for Woods' return to the circuit remains a mystery. "Only Tiger and his doctors know the answer to that," said Nicklaus.
A published report in Time Magazine
confirmed his uncertainty about his future prospects as he battles nerve damage to his back sustained in a practice session at his Florida home.