The 31-year-old Spaniard assured himself the world No.1 ranking by beating Hyeon Chung 7-5 6-3 in the second round of the Paris Masters.
The 16-time grand slam winner had not finished the year at the top since 2013, with Novak Djokovic and Andy Murray doing so after that.
"One year ago, for sure I never dreamed about being No.1 again at the end of the season," Nadal said.
Nadal's comeback from injury, loss of form and confidence, has been remarkable.