Murray, 31, fought back tears in Melbourne on Friday as he announced that this would be the final time he will contest the Australian Open after failing to recover from a persistent right hip injury.
The three-time grand slam champion had hip surgery in January last year and although he returned to the tour last summer, it was clear he was still in significant pain which has ultimately forced him into premature retirement.
Upon learning the news, Djokovic said he understood the decision but claimed it was a significant blow for the sport to lose such a great player.
"It's quite a shock for me because we're the same age, same generation and it's sad to see him going through what he has gone through in the last couple of years with his injuries," Djokovic said. "As someone who has been through a major injury with my elbow, I can definitely empathize with him and relate to what he's going through. Obviously, the extent of his injuries are even worse than mine."
"Since I was 11 or 12 years old we know each other and we've been rivals. We've played some epic matches all over the world and it's kind of sad to know that he will play his last Australian Open but I do wish him all the best. He's a great champion."
Djokovic returns to Melbourne Park seeking a record seventh Australian Open crown, one that would take his career grand slam tally to 15.
He says arriving Down Under always bring out the best in him on the tennis court.
"I come in with a lot of good energy and I'm inspired to play my best," Djokovic said. "This is the place where you try to kickstart the year in the best possible way.
"I have only the most wonderful memories from Rod Laver Arena and the Australian Open in general. My first grand slam win back in 2008 served as a great springboard and confidence booster for my career."
The Serbian will face little known American Mitchell Krueger in the first round of the tournament but isn't getting carried away with what could happen deeper in the event given that the draw means he would not face either reigning champion Roger Federer or Rafael Nadal until the final.
"It's a two-week long event and I don't want this to sound like a cliché but it really is true, you just try to focus all your thoughts on your next opponent and try to start off well.
Obviously I know what my draw looks like, potentially. If I get to the final and I get to play [Federer or Nadal] I will be very happy."