Asked at a news conference on Wednesday what she thought of Obama, Merkel responded: "I would say that he is well-equipped -- physically, mentally and politically."
Obama is due to meet with Merkel for about an hour on Thursday morning and will later give a speech on transatlantic relations at the "Victory Column" in Berlin's Tiergarten park.
Merkel objected to initial plans by the Obama campaign to hold the speech at the Brandenburg Gate. His appearance is expected to draw tens of thousands of Germans, who polls show prefer him to his Republican challenger John McCain.
Since coming to power in 2005, Merkel has repaired relations with Washington damaged when her predecessor Gerhard Schroeder clashed with U.S. President George W. Bush over the Iraq war.
Bush was famously caught on camera at a G8 meeting in 2006 giving Merkel a quick backrub and the chancellor was asked on Wednesday whether she expected more massages from Bush's successor -- whether it's McCain or Obama.
"That's not really up to me," she joked. "But I wouldn't resist."
Merkel said she would not be in Berlin for Obama's hotly anticipated speech, but added: "Maybe I'll turn on the television."
(Writing by Noah Barkin; Editing by Catherine Evans)