Musharraf's key ally Muttaheda Qaumi Movement's decided to sit on opposition benches in parliament.
Musharraf, who launched the All Pakistan Muslim League (APML) in Oct 2010, said he would return to Pakistan "before the next election".
"We are ready to contest elections," the Daily Times quoted him, as telling reporters at his apartment in Dubai.
"A little more time would be useful as we are a new party. However, we will definitely try if the elections come early," the APML leader added.
Earlier, Musharraf had announced that he had a good chance of winning the next presidential election due in 2013, and he would return to his country before that to "introduce a new political culture.
Though Musharraf recognised that on his return, he would have to face some legal cases and also that there would be danger to his life.