Faugheen was a brilliant winner of the Grade One contest last January, but was unable to defend his crown in the Champion Hurdle at the Cheltenham Festival due to injury.
In his absence, Annie Power was supplemented for the two-mile showpiece at Prestbury Park and became the first mare to win the Champion Hurdle in 22 years.
Neither horse has been seen in action so far this season, but Mullins issued an upbeat bulletin on their progress at Thurles yesterday.
“Both worked nicely this morning, so I’m very pleased with them,” said the champion trainer.
“Both horses are pleasing me a lot more now than they have been, so we’re well on course with both of them at the moment.”
Elaborating on plans, Mullins said: “We’ll see how they go between now and then. What I’d like to do is get Faugheen there (Irish Champion Hurdle) and probably get Annie Power to that mares’ race in Punchestown she won last year.
“That would be the ideal scenario.”
Meanwhile Mullins is responsible for 15 of the record 53 entries for the OLBG Mares’ Hurdle on the opening day of the Cheltenham Festival on March 14. Mullins has won the last eight runnings of the Grade One contest, with the great Quevega claiming six consecutive renewals between 2009 and 2014.
Glens Melody struck gold in a 2015 renewal that will forever be remembered for the heartbreaking final-flight fall of stable companion Annie Power, while Vroum Vroum Mag triumphed 12 months ago.
Annie Power, who won the Champion Hurdle last March, is in Mares’ Hurdle contention once more, as is Vroum Vroum Mag.