The England international has not played a competitive fixture since he was taken from the field on a stretcher in Arsenal's FA Cup victory over arch rivals Tottenham in January.
However, Walcott was named among Arsenal's substitutes for Saturday's 2-0 Premier League win over Sunderland at the Stadium of Light.
The forward was not brought on to face Gus Poyet's side, but his presence was certainly an encouraging sign for Wenger.
Frenchman Wenger will take no risks with the former Southampton man after such a long spell on the sidelines.
"He is fit but lacks competition. Physically, he lacks contact in games and competition," Wenger said.
"Fitness-wise, there are no problems at all."
Walcott has featured in under-21 games for Arsenal and is now striving to force his way back into the first team.
