"We see a light at the end of the tunnel, now that the process of rapprochement has started," he said during a trip to Brazil.
Mr Musharraf is on his first official tour of Latin America.
He held talks with Brazilian President Luiz Inacio Lula da Silva, aimed at improving diplomatic and trade ties.
The two leaders signed agreements on fighting drug-trafficking and reducing hunger.
Mr Musharraf is also due to visit Argentina and Mexico.
'Extremist minority'
Speaking in Brasilia, Mr Musharraf said he was ready to push forward the peace process between his country and historic rival India over the disputed territory of Kashmir.
However, he suggested India had to do more.
"I would like to say that it needs two hands to clap. So my hand is there, I hope the other hand will also be there and then we will be able to reach peace."
The process would not be derailed by "the extremist small minority which is trying, through militancy, to dominate the majority", he added.
Historic visit
Gen Musharraf's visit to Brazil is the first ever by a Pakistani leader.
Before the visit, Gen Musharraf said he saw a "very bright future on the economic, and commercial, and trade ties between Pakistan and Latin American countries, and Brazil in particular".
He is the latest in a series of leaders to be welcomed by President Lula as he seeks to raise Brazil's international profile.
Mr Lula is also trying to win support for Brazil's bid to win a permanent seat on the UN Security Council.
After visiting Argentina and Mexico, the Pakistani leader will go to Washington, where he is expected to hold talks with President George Bush, before travelling home via London and Paris.