The 69-year-old actor, who was not keeping well of late, was admitted to Lilavati Hospital in suburban Bandra due to "exhaustion" and "weakness".
"He (Rajesh) is fine...He is much better today. He should get discharged in a day or two," Khanna's estranged wife Dimple Kapadia, who is taking care of him told PTI.
Speculations were that Khanna was suffering from liver infection whereas some reports say that his kidneys have been severely affected.
However, Dimple denied the reports saying the actor was only "little Weak".
"No, not at all. He is exhausted and a little weak.. So for better care we have brought him to the hospital," the actress who is tending to him at the hospital said.
Khanna's manager Ashwin had said earlier this week that the actor had stopped taking food for the last three-four days though he was at home.
Also Read
However, "Kaka", as the actor is fondly referred to in the industry, had emerged at the balcony of his house 'Aashirwad' on Carter Road in suburban Bandra to wave at his fans and media persons.
Flanked by his wife and actor son-in-law Akshay Kumar, a bearded Khanna, though looking frail, attired in a crisp Kurta and sporting black shades, repeatedly flashed the victory sign with a smile.
Earlier in April too, the actor had to be admitted to Lilavati Hospital after he complained of uneasiness and exhaustion.
The actor was hailed as India's first superstar after 15 consecutive solo superhits between 1969 and 1972 including "Aradhana", "Haathi Mere Saathi", "Anand" and "Amar Prem".
He was recently seen appearing in his first television ad, directed by filmmaker R Balki, for Havell's fan.