Trainer Willie Mullins believes the Irish Champion Hurdle at Leopardstown next month is "back on the radar" for Faugheen.
Mullins has yet to establish the precise reasons behind the gifted 10-year-old's meek reverse in the Ryanair Hurdle over Christmas.
But Faugheen impressed his trainer in a canter on Monday morning and could now return to Leopardstown on 3 February in a race he won two years ago.
Mullins told the Irish Times: "It (Irish Champion Hurdle) wasn't there before, but it's come back on the radar with what I've seen (on Monday morning).
"I was very taken with the canter and our vet checked him over immediately afterwards and said he was fine.
"During the week it looks like I'll be able to put him back into full work."
Stablemate Yorkhill (above) was also a disappointment over the festive period, having finished well beaten in the Leopardstown Christmas Chase on his first start over three miles for Mullins.
Last season's JLT Novices' Chase winner will now drop back in trip, with a Cheltenham Gold Cup campaign seemingly off the agenda.
Mullins said: "I've no doubt he would stay (three miles) if he had a better temperament. He's bred to stay.
"But at the moment we're looking at shorter trips for him. I think his next run will be at a shorter trip over fences.
"I don't think he has to go left-handed. He'd be a lot easier to ride left-handed, but if we're stuck for opportunities we'll have to go right-handed.
"Over a shorter trip, going faster, he may not have a problem."
Classy mare Limini will not make it to the track in time for the Cheltenham Festival.
The seven-year-old, owned by Rich Ricci, has not been seen on a racecourse since she finished third to Apple's Jade in the Mares' Hurdle at Cheltenham last March.
Mullins said: "It's a constant battle to keep Limini right and if she runs over hurdles this season it will be at Punchestown.
"She won't make Cheltenham. And I'm quite keen to run her on the Flat."