Ali, who died in 2016, was convicted of draft evasion in 1967 and sentenced to five years in prison, but the conviction was overturned on appeal by the US Supreme Court in 1971.
"I'm thinking about Muhammad Ali. I'm thinking about that seriously. And some others and some folks who have sentences that aren't fair," Trump told reporters at the White House before heading to Canada for the G7 summit.
Trump described Ali as "not very popular" at the time of his refusal to serve in the military during the Vietnam War.
But while controversial, Ali's resistance on grounds of conscience made him a hero to many during a highly polarized period marked by struggles over racial inequality and rising opposition to the US role in the Vietnam War.
A charismatic fighter who won his first world heavyweight title in 1964, Ali was banned from boxing for three years as a result of his conviction but went on to reclaim the championship in a stellar career that lived up to his boast of being "the Greatest."
A lawyer for Ali's family, Ron Tweel, said while Trump's gesture was appreciated, "a pardon is unnecessary," given that the sentence was overturned.
"There is no conviction from which a pardon is needed," Tweel said in a statement sent to US media.
Trump has wielded his presidential pardon powers recently in ways that appear intended to dramatize his own complaints of being the victim of a "witch hunt" by US prosecutors.
On Sunday, he asserted for the first time his "absolute right" to pardon himself, sparking fierce debate and a warning from Republican House speaker Paul Ryan that no one is above the law.
"No. I'm not above the law. I never want anybody to be above the law. But the pardons are a very positive thing for a president. I think you see the way I'm using them," Trump told reporters.
Among those he has pardoned is Jack Johnson, a black heavyweight champion who was convicted in 1913 in a racially charged case of taking a woman across state lines for "immoral purposes."
He also issued a pardon to Dick Cheney's former chief of staff Lewis "Scooter" Libby, who was convicted of lying to the FBI in connection with the leak of a CIA operative's identity.
Trump followed that by pardoning conservative firebrand Dinesh D'Souza, who pleaded guilty in 2014 to violating US campaign financing laws.
On Wednesday, he commuted the life sentence of Alice Marie Johnson, a 63-year-old black woman who was convicted of a non-violent drug offense.
Her case was brought to Trump's attention by reality TV star Kim Kardashian, while Jack Johnson's was championed by actor Sylvester Stallone of "Rocky" fame.
Trump has also said he is mulling pardons for lifestyle guru Martha Stewart, and Rod Blagojevich, a former Illinois governor convicted in 2009 of soliciting bribes for political appointments, including former president Barack Obama's vacant US Senate seat.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)