Newtwon-John told Britain's The Mirror that a reunion could be in the works next year to mark the 1978 film's 40th anniversary.
The Australian actress and singer, 68, confirmed that she and Travolta have been discussing ideas for a reunion, but she didn't divulge any details.
Speaking ahead of the Fame Awards at Hard Rock Live in Las Vegas, where she was receiving the Icon Award, Newton-John told The Mirror, "We are thinking up ways. Nothing to announce yet."
"Forty years anniversary of 'Grease,' which I can’t believe," she continued. "Time goes so fast. It is so exciting."
Marking the 40th anniversary could be one of Newton-John's last performances before she retires from 50 years in show business.
"As time goes on I think of doing less and having more time off," she said.
But it wouldn't be the first time the thought has crossed her mind.
"Every year for the last 20 years, I thought I was retiring and then somebody would say, ‘How about this?’ and it’s like, ‘Oh, that looks fun,’ or ‘How about this?’" Newton-John admitted. "Things that I would never think about."
Though the now-iconic film had a 1982 sequel, "Grease 2," neither Newton-John or Travolta were involved. It starred Maxwell Caulfield and Michelle Pfeiffer and was a commercial failure.