Watson remains subject to the league's 11-day concussion stand-down, after he was floored in the first half of the Roosters' preliminary-final win over the Dolphins.
The utility had been on the field for just 60 seconds as a substitute when his head collided with Dolphins forward Kulikefu Finefeuiaki's hip in the 31st minute at Suncorp Stadium on Friday.
The knock was originally ruled as category two by the Roosters, before that was overruled by the independent doctor, who deemed it category one.
That ruled Watson out of the game and triggered the league's concussion protocol, but after the game Roosters coach Trent Robinson refused to rule out seeking an exemption for the NSW Origin utility.
To clear Watson, the club will need to prove he was wrongly classified and was asymptomatic from Saturday morning, among several other requirements.
Star halfback Sam Walker, who emerged unscathed after a record-equalling 27-day comeback from a syndesmosis injury, said Watson had recovered well after the hit.
"He's in really good spirits. He's pulled up after it OK," Walker said.
"You wouldn't really know he's even had a head knock."
Veteran half Daly Cherry-Evans deferred to the club's medical staff, but also attested to Watson's recovery.
"What you see is he's honestly bounced back so quickly," Cherry-Evans said.
"All those decisions are way above our pay grade. That's up to medical staff … but from what I've seen, Connor's bounced back really well."
If Watson is ruled out, Benaiah Ioelu could be used to substitute Reece Robson at dummy-half.
The 22-year-old started the season at hooker with Robson injured, but has played just five games this year.
Hugo Savala could be another option, given he entered the fray to relieve Walker late in Friday night's win.
Watson is the first player at risk of missing an NRL grand final under the 11-day stand-down run, which was introduced in 2023.
Penrith faced the potential of a similar situation last year, when Scott Sorensen suffered a head knock in their preliminary final loss to Brisbane.
Sorensen was also deemed to be category two by club medical staff, before the NRL's independent doctor classed it as category one.
Had Penrith won the match, it is understood they would have appealed to have Sorensen play in the grand final.
There have been multiple instances this year of players successfully challenging category-one concussions, with Walker adamant Watson would be able to get himself right for the decider.
"For sure, as long as he does everything right and gets himself in the best position," Walker said.
"He's probably the most dedicated with his routine out of anyone that I've seen anyway.
"I know it'll be no different this week for him. His health is the most important thing.
"Fingers crossed he does everything he can. And if he's right to go, we'd love to have him out there."
