Carter was recalled to the All Blacks squad this week after playing just one club game and two Air NZ Cup matches since he snapped an Achilles tendon in France in February.
Many All Blacks fans are hoping he can turn around a team which produced error-ridden, below-par efforts to lose twice to South Africa last month.
Henry said yesterday Carter was looking good in training but no decision had been made whether he would replace Stephen Donald.
"We're selecting the side on Tuesday, in Sydney, and we'll have to wait and see," he said.
"The squad of 26 will be announced on Saturday night . . . and we'll select a 15 and seven substitutes on Tuesday."
Henry said Carter had played well for Canterbury against Auckland last weekend and was keen to play.
"He's jumping out of his skin. He's enjoyed his training. He'll do his best but I don't think there's any greater expectation on Daniel Carter than any other time that he's played for the All Blacks," he said.
"I think he's in good shape in his mind and if he gets selected, I think he'll do a good job."
Carter said he was ahead of where he expected to be in terms of his rehabilitation from his injury and he was looking forward to All Blacks rugby again.
"I didn't want to put too many expectations on myself on my return. I just wanted to be out there and start playing when I felt comfortable and everything's gone extremely well, which is encouraging," he said.
"I guess I'm quite lucky, with my experience, to know what to expect and it is a huge step up from Air NZ Cup. But I wouldn't be here if I didn't think I was ready to play international rugby again."
Captain Richie McCaw said Carter would add something to the team but that his team-mates would also need to improve.
"We don't expect him to come back in and be the miracle man," McCaw said.
"We've all got things we've got to make sure we get right and he's got to slot in and carry on with what he does well."
Henry said the All Blacks received "a bit of a rark-up" yesterday before their first training session since returning from an unsuccessful journey to South Africa.
"When you lose two test matches and you're not happy with the way you play, you've got to be honest and open and frank about it, and we had an honest and open and frank discussion," he said.
"We looked at our challenges, and we've got a few of those, as you can all appreciate from the South African tour.
"We looked at positives, as well, from what we did over there, and we're trying to make sure we've got a road forward going into the Sydney test."
McCaw said the session was not all negative.
"You can come off a game like that thinking everything's all wrong but it's a lot of little things that are fixable and we've got to make sure we do fix them before next weekend.
"It's not all doom and gloom but we had to be pretty honest with things that weren't right."
Halfback Piri Weepu threw a scare into the camp near the end of training when he went down after twisting an ankle.
Henry said Weepu had told him the ankle would be all right "but they all tell me that.
We'll see what happens in the next 48 hours".
Henry believed the team could turn its performances around.
"I just think we've got to be positive and work hard and understand we were beat and why we're in this situation and try and rectify that.
"The next one is always the pivotal game. We're in a situation where we've lost two in a row, as we did last year, and it becomes a pretty critical test."
