Serena Williams heaped praise on beaten finalist Justine Henin after retaining her Australian Open title at Rod Laver Arena.

The women's final ended in favour of the American after she won 6-4 3-6 6-2.

Henin was making her comeback from a 20-month retirement, but fell short of completing a fairytale return as Williams dominated the final set to clinch the crown.

A clearly delighted Williams warned the rest of the women's game that Henin is back and ready to win titles once again.

"I'd like to congratulate Justine for having a fabulous tournament and giving me such a great run today," she said during the post-match presentation.

"I think it could have gone either way and I definitely think she's back so all you guys back there definitely have a lot to cheer for."

Williams had to stave off a brave fightback from Henin who had gone into the decisive third set with the momentum after reeling off four consecutive games to level the match.

"It's been a very emotional two weeks for me," the Belgian said. "I thought they would never happen again, that I could come back on the court.

"I've really enjoyed my tournament and I think this is the best place for me to start here in Australia because you know tennis so well, you know the culture of the sport so thank you for your support.

"I'd like to congratulate Serena who is of course a real champion so well done again."

Henin then signed off by telling the crowd: "I can say it again, I'll see you next year."