TAIPEI (Reuters) - World number one Rafael Nadal has been laid low by flu this week but Andre Agassi is confident the illness will not scupper the Spaniard's chances of winning the Australian Open later this month.

However, his illness has cast some doubt over whether he will be able to last the distance by playing seven matches in the unforgiving Australian heat.

"He (Rafa) came off dominating the year (2010) and he took a healthy break after the U.S. Open, so he is going to be rested and confident," former world number one Agassi said on Saturday at the Rise of Legends exhibition in Taiwan.

"(Roger) Federer also played fantastically at the end of the year. I think it's a close race between these two players but Nadal has a bigger chance now," added the American.


Ominously for the Spaniard's rivals, Agassi warned that he had not reached his peak.

"Nadal is not even at his prime yet, he is still getting better. Nothing Nadal does will surprise me anymore," said Agassi.

"It's not easy to reach (Bjorn) Borg's record at Wimbledon but it's amazing what the Spanish player has done at Wimbledon with the game he has."

Nadal, who was unable to defend his Wimbledon crown two years ago because of painful knees, has been an outspoken critic of the men's calendar which he believes does not allow players to take a long enough break.

Although the ATP season will be shortened by two weeks from next year, Agassi feels the players need to listen to their bodies more instead of simply fulfilling their commitments.

"After I was world number one, I did not have to care about being number one of the world for two, three, or four years in a row," said the eight-times grand slam champion.

"I just focused very much on keeping myself healthy and trying to prepare (for the) big tournaments. I made very good decisions that allowed me to play longer."

(Writing by Pritha Sarkar in London; editing by Ken Ferris)