Farrell missed last week’s 69-3 win over Tonga after testing positive for Covid-19 in preparation for the game.
That result has since been confirmed as a false positive and Farrell trained this week with the 30-year-old expected to return to the squad for Saturday’s clash with the Wallabies.
In Farrell’s absence last week, Northampton Saints forward Courtney Lawes was the team’s first captain.
Underhill praised the 32-year-old for a job well done, but added that the team are delighted to have Farrell back at camp.
“He’s a brilliant guy to have around. He is very influential, he is a very motivating character, ”he said.
“He works hard, leads people around and brings a good sense of calm. I thought Courtney was great for taking on this role last week, again a very cold guy, but he instills a lot of confidence in everyone. It’s good to find Owen, but I think we handled it well.
England have an impressive record against Australia, which were beaten by Scotland last week, and are looking to claim eight straight wins against their rivals.
But Underhill warned, “They’re a tough team, they’re aggressive, physical, they challenge the breakdown a lot and they’re a dangerous offensive team.
“When they have the ball they have brilliant individuals who can break tackles, they’re a dangerous team.”