"I'm doing real well – a little better every day," the country legend tells PEOPLE. "I have a little bicycle in the back room I'm starting to exercise on and I'm going into the studio to see how my voice sounds."
Haggard, 71, had surgery in November to remove a lemon-sized tumor. "Most of the reports were like, 'He's got six months to live!' There was never any indication of that," he says.
"I lost the upper lobe of my right lung where there was a tumor suspended like a fruit on a tree. But there was no chemo and I got real lucky."
Haggard was a heavy cigarette smoker until he gave up his Camels in 1992, but insists his cancer wasn't caused by smoking.
Post surgery, Haggard has a new outlook. "I feel like I've extended my life," he says. "I'm in better shape than when I went in."
Still Writing SongsThe singer already has tour dates planned. "I need an enormous amount of money to maintain my lifestyle so I've got to go to work!" he jokes. "The economy requires it!"
He's also back to work penning new songs, including a new tune inspired by President Barack Obama called "Hopes Are High," which he wrote two days before the inauguration.
A sampling of Haggard's lyrics: "We got a new style with a sincere smile/And a new song to sing along/And we've got sunshine and a new guy/And hopes are high/Hopes are high"
The song has a sunny outlook, but Haggard says he's realistic about the new president. "I can't see that one man can walk into turmoil like this and do much about it," he says. "I don't look for him to change anything overnight."