In his last competitive match, Djokovic was crushed 6-3 6-1 by Rafa Nadal in the Monte Carlo Open final, three days after receiving the news about his relative.
He then pulled out of the Serbia Open in Belgrade saying he had "no emotional energy left@ and needed to rest.
"I have had some time since my last tournament in Monte Carlo to regroup and prepare for what's coming up and I skipped my hometown tournament because of the circumstances I was in," Djokovic said.
"I didn't find it was the right time to perform in another tournament. I just wasn't emotionally ready, so I got that extra week to rest, and to prepare, and to practise and now what happened is behind me, and I feel good."
Djokovic's defeat to Nadal in Monte Carlo was his first reverse against the Spaniard in eight meetings, a run which included beating the world number two in Madrid last year during an outstanding 2011.
The lanky Serb said the rest had also done him good as he sets out on a hectic schedule from now on, which includes a tilt at a fourth Grand Slam title in a row in the French Open at the end of the month.
"It is a very busy season now," he added. "We have Madrid, we have Rome, Roland Garros, Wimbledon and the Olympic Games. It's a lot of tournaments in a short period of time."
Djokovic, like most of the competitors in Madrid, has been questioned about the controversial blue clay courts being used for the first time in a tournament.
"My opinion is that there are certain differences in the blue clay when compared to the red clay," he said, without specifying.
"We can talk about it a lot but we already have it here in front of us. The only thing that is a little disappointing from the players' point of view is that this was decided without the players' agreement.
"I'm not blaming the tournament, because they are fighting for their own interests, but I am sure the ATP could have done better job in representing the players rights.
"As I understand, we have the agreement for one year so we'll see what's going to happen at the end of the week."