Nadal was up a set and a break against the American but was unable to seal the win, eventually losing 3-6 7-6(4) 6-1.
The 22-time Grand Slam champion's defeat in Paris came in his first singles match since the U.S. Open fourth round in September, after which he took time off for the birth of his first child.
He has never won the ATP Tour's finale, which runs from November 13th-20th in Turin this year, though he has reached the final twice.
"I'm excited about playing, even if it hasn't been the perfect couple of months for me," Nadal said.
"It's true that for the last five months I didn't spend enough days on the Tour. I don't even say competing on a tennis court. I say on the Tour. Practising with the guys. That's what I need ...
"For me (it's) difficult to imagine now arriving in the World Tour Finals in enough good shape to win a tournament that I didn't win during all my tennis career."
