The American, who captured six gold and two bronze at the Athens Games in 2004, and eight gold at Beijing in 2008, takes part in the World Cup short course event in Berlin at the weekend, having started his season in Moscow on Tuesday.
After Berlin, he'll head home where the build-up to the 2012 Olympics begins in earnest.
"I'm in best form since 2008. I'm a lot happier and in better shape than last year. In 2009, I took six months off after the Games. I was in the worst shape of my life," said Phelps.
The 26-year-old started his season in Moscow where he was defeated by Germany's Paul Biedermann in the 200m freestyle.
Biedermann, the short course world record holder, clocked one minute 43.15sec to finish 0.16sec ahead of the American swimming legend.
However, Phelps then claimed the 200m backstroke with a time of one minute 53.24sec, finishing 0.28sec ahead of second-placed local favourite Artem Dubovskoy.
"The important thing is not what happens today but down the road. I have time to change things and prepare and get ready. Hopefully I'll improve small things.
"Each meet is going to help me prepare for next year."
Phelps also said that beating the all-time Olympic gold medal haul of 18, held by Soviet gymnast Larisa Latynina, is not high on his list of priorities.
"To tell you the truth I never knew about it until early this year. I focus on my own goals. I can't control what other people can do," he added.