The decision comes as the county appears to be preparing for next year's promised general election.
The court had turned down several requests since the Nobel Peace Prize laureate was given 18 months for violating her previous house detention after a U.S. man entered her lakeside home and stayed uninvited for two days.
Suu kyi, 64, was harboring John William Yettaw who swam across the lake and entered her house in early May. Her defense lawyers argued that she had repeatedly asked him to leave and so was not guilty.
She has been a high-profile and often an embarrassing prisoner for the military junta over the years since the leadership refused to recognize her landslide win in a 1990 national election widely seen as free and fair.
The trial in August was given much media coverage worldwide and many heads of government -- including the United States, Russia and China -- were vocal in their condemnation, urging the military to release her and other political prisoners.
Analysts said at the time that the coverage had an effect and the head of the military, Senior Gen. Than Shwe, halved the sentence and allowed her to continue serving her time at her lakeside home.
The court's decision to hear an appeal, announced in the city of Yangon, formerly called Rangoon and also the former capital city, was announced amid rumors that Suu Kyi might be released, reported the Indian-based expatriate-staffed news Web site Mizzima.
Suu Kyi had written a letter to Shwe requesting a meeting with him to further discuss what she could do to help lift Western sanctions against Myanmar, many imposed because of their treatment of her. Shwe allowed her to meet some party leaders last week, Mizzima said.
However, the military has not allowed her to meet with people of her own political party, National League for Democracy.
Easing up on the tighter aspects of her detention is one thing, but allowing her more political room is another. The government has scheduled national elections next year, and keeping her detained is likely a barrier to her running again for office.
Although the military promised the elections, there is as yet no fixed date. But there are reports of some political organizing and clashes in villages as well as some infrastructure preparations in cities.
A street fight was reported between a pro-democracy group and the pro-government Union Solidarity and Development Association, which has begun campaigning in villages near Yangon, another report in Mizzima noted.
Around 20 USDA members and 200 villagers attacked the group with sticks and stones, according to members of the group. Their flags and placards were set on fire, but no one was seriously injured.
There are some indications that the government is starting to spruce up the capital, the newly built city of Naypyidaw. The Parliament building looks like it will be completed in time for the 2010 elections, said Michael Lwin, a research fellow at Georgetown University. Lwin recently traveled to Myanmar to research Burmese law, culture and religion.
"Last month I saw workers scrambling to lay down asphalt from the public street to the Parliament, on long roads that are now only adumbrated dirt paths," he wrote on the World Focus news Web site.
He also noted that the State Department's 2008 Human Rights Report on Myanmar listed multiple violations by the government, including indefinite detention without charges, attacks on ethnic minorities and infringements on civil liberties.