Roland Garros committee member Guy Forget had suggested Nadal, who has slipped to fifth in the rankings after a lengthy injury layoff, should be seeded higher to avoid a potential quarter-final meeting with world number one Novak Djokovic.
That was rejected by tournament director Gilbert Ysern, who said the move would not have been welcomed.
Federer, the only other player to win the Roland Garros title since Nadal's first triumph in 2005, told a news conference at the Madrid Open on Sunday that while Nadal definitely deserved a higher seeding it would not make much difference in the end.
"He's been so successful there in the last eight, nine years that everybody knows that he deserves it," Federer said.
"But it's not like he's ranked 80 in the world and he's going to bump into the seeds or bump into the top four or something like that.
"Is it really going to make a huge difference if he's five or one? Not a whole lot.
"Rafa obviously has a great chance because of the great player he is on clay.
"I'm happy that they took a decision regardless of which one was the right one, just to go with something. Now there is peace and quiet around it again."
At an earlier news conference, Nadal, who returned in February after seven months out with a knee injury, said he didn't think he should be a awarded higher seeding because of his phenomenal clay record.
"The players that are in front of me are there because they have been playing better than me," he said.
"Well, in fact they have played. I haven't played and I haven't trained either.
"Good for them for not being injured. The problem is mine."
Federer, 31, is making his return in Madrid after taking time out following his defeat to Nadal in the quarter-finals of the Indian Wells Masters in March.
He said it hard been hard to watch his rivals racking up titles in his absence and that he was "extremely excited" to be back on the Tour.
"Obviously you're working hard but there is no glory really in working on a practice court with nobody watching you play.
"What we play for at the end of the day is playing in front of fans and being part of the show and achieving things in your career you always dreamed about.
"For that, I need to work hard as well. I need to get away from it all, so that when I do come back I'm excited and motivated. That's what I feel right now, and that then can carry you a long way.
"For me, it was important to take a bit of a rest. Not too long, just enough so I'm really sort of tough to beat in the next few months."
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