Malala, 15, was with her family Thursday for the first time since she was flown to a British hospital for treatment, CNN reported.
"In the condition when I saw my daughter ... we were hopeful but we did not expect ... that she can talk, that she can see," her father, Ziauddin Yousufzai said Friday.
Her progress has been "a miracle for us," he said.
"I love her and ... when we met her there were tears in our eyes and they were out of happiness, out of happiness." h
The teenager -- acclaimed around the world for her bravery in opposing the Taliban and fighting for education for girls in her hometown in Pakistan's Swat Valley -- made slow progress at a Birmingham hospital, doctors said.
Pakistani authorities looked for a main suspect in the attack, identified as 23-year-old identified Atta Ullah Khan, a master's degree student of chemistry who remained at large.
Police have already arrested six other men in the Swat Valley in the Oct. 9 shooting of Malala and two other schoolgirls as they traveled in a school bus. The Pakistani Taliban have claimed responsibility for the attack and vowed to kill Malala if she recovers because of her support of secular education. The other two girls were not believed to be seriously hurt.
Pakistan's Dawn newspaper said Malala's parents, her brother and a relative flew to England, where Malala was taken Oct. 15 after doctors in Pakistan removed a bullet from her head.
Malala's father, himself an ardent advocate of education, has expressed confidence his daughter would recover. There has been a huge outpouring of sympathy and support for the girl in her country, and the Pakistani government has promised protection for her and her family.
Dawn quoted a Thursday announcement from the medical team caring for Malala in Birmingham that she was comfortable and responding well to treatment.
CNN said Malala has been unable to speak because of a tube put in her trachea to protect her airway.
In an earlier report, CNN quoted the medical director at the Birmingham facility as saying Malala would need "a significant period of rest and recuperation" before undergoing reconstructive surgery. She is now able to move her extremities and stand up with help from nurses.
"The mission she has taken forward and the education awareness that has spread across Pakistan is all Malala's doing," said Pakistani Interior Minister Rehman Malik.
CNN quoted Malik as saying Pakistani President Asif Ali Zardari spoke to the family and assured the father he could stay in Britain as long as needed.
In a message to her country, Malala thanked the citizens for their support and for honoring her, CNN said.
The BBC reported Malala's father dismissed reports his family may seek asylum in the West because of threats by the Pakistani Taliban.