By Martyn Herman

LONDON, Nov 19 (Reuters) - Rafa Nadal will be pose a significant grand slam threat again next year after showing signs of returning to his best, according to two of the Spaniard's greatest rivals.

Spaniard Nadal slumped to 10th in the world rankings this year after a crisis of confidence and form, but since a third-round defeat at the U.S. Open by Italian Fabio Fognini he has rediscovered his old spark.

So far this week at the ATP World Tour Finals he has beaten world number four Stanislas Wawrinka and number two Andy Murray, without dropping a set to reach the semi-finals with a match to spare, where he will face world number one Novak Djokovic.

Serbia's Djokovic, who trails Nadal 23-22 but has won all three matches this year, says the 29-year-old is over his slide.

"It's a fact that he's been playing better and he's been raising his level ever since U.S. Open," Djokovic told reporters after his victory over Tomas Berdych on Thursday.

"You can feel that he's starting to get comfortable on the court, starting to play better.

"The couple of matches, first couple of matches he played here against Wawrinka and Murray showed that, showed that he feels more confident, shows that he's starting to miss less, serve efficiently, use his forehand much better."

Seventeen-times major champion Roger Federer has suffered at the hands of Nadal more than any other player, losing 23 of their 34 contests, and fully expects the Mallorcan to continue his form into 2016, providing he stays fit.

"Maybe for his standard it's not the best season. What is he going to finish, top five? It's still a good season," said the Swiss. "Everybody would take that except maybe a few players at this tournament. The rest would all love to be in his shoes.

"I think he's going to get stronger. With some time to practice and reassess his game, he's going to be tough to beat in Australia. I believe that." (Editing by Greg Stutchbury)