Hospital authorities say Malala can read and speak, but cited patient confidentiality when asked whether she is well enough to continue her education in Britain.
While little has been made public about Malala's medical condition, younger brains recover more fully from trauma because they are still growing. Dr. Anders Cohen, chief of neurosurgery at the Brooklyn Hospital Center in New York, estimated she might recover up to 85 percent of the cognitive ability she had before — more than enough to be functional.
"She'd be able to move on with life, maybe even become an activist again," said Cohen, who is not involved in Malala's treatment.
In the Swat Valley, people reacted with joy at the news of her release. Family and friends handed out sweets to neighbors in Malala's hometown of Mingora.
"Obviously we all are jubilant over her rapid recovery, and we hope that she will soon fully recover and would return back to her home town at an appropriate time," said Mahmoodul Hasan, Malala's 35-year-old cousin. Like Malala's father, he runs a private school in Mingora.
But the Swat Valley remains a tense place. Only last month, several hundred students in Mingora protested plans to have their school named after Malala, saying it would make the institution a target for the Taliban.
Malala's father vowed to return to Pakistan with his family once Malala is fully recovered.
"I thank the whole of Pakistan and all other well-wishers for praying for her and our family," he said. "What I am doing here is all temporary, and God willing we all will return to our homeland."
Zada reported from Mingora, Pakistan. Associated Press writers Rebecca Santana in Islamabad and Sylvia Hui in London also contributed to this story.