LOS ANGELES (AFP) - Folk legend Joni Mitchell is making "remarkable progress" towards an expected full recovery, three months after being rushed to hospital, her lawyer said in comments released on Wednesday.

The assessment came as a judge in Los Angeles extended a conservatorship over Mitchell, noting that the singer still lacks capacity to make informed medical decisions.

Mitchell's conservator Leslie Morris said last month that the 71-year-old Canadian singer suffered an aneurysm but said that other details were "mostly speculative."

The music icon was initially kept in hospital after the March health scare, but subsequently moved back to her Los Angeles home - where her court-appointed lawyer Rebecca Thyne visited her on June 26.

"It was clear that she was happy to be home and that she has made remarkable progress. She has physical therapy each day and is expected to make a full recovery," said the attorney in court documents released Wednesday.

LA Superior Court Judge David Cunningham agreed to extend the conservatorship until a new hearing scheduled for July 8 next year.

"While (Mitchell) has made great progress toward recovery, the capacity declaration of (a neurologist) indicates that she lacks capacity to make informed medical decisions," Thyne wrote.

"I agreed that (Mitchell) still needs assistance with such decisions," she added.

Mitchell, one of the defining singer-songwriters of the Baby Boomer generation, was rushed to a Los Angeles hospital on March 31 and rumours have since crept up repeatedly about the state of her health.

Mitchell - known for her distinctively rich contralto voice and open-tuned guitar - sang hits that included Big Yellow Taxi, Both Sides, Now and Woodstock.

She has also been active in political causes including the environment and the Native American rights movement.