The star was speaking in an interview for Australian television.
She also showed off a picture of Ethan, her baby with partner Kris Smith, on her mobile phone.
Dannii said: 'I still can't believe I'm a mum. When people tell me, 'You're a parent now', I kinda think, 'Is that me?'
'Those words don't seem to fit yet. He's a very good baby. He sleeps, which is just perfect. Smiling, laughing, no rolling but he grabbed his first teddy bear the other night.'
She also talked about what prompted her to enter showbiz.
'I knew I wanted to sing when I saw Olivia Newton-John in Grease,' she said. 'I thought that looks fun. Anything with singing and dancing in it, I loved.'
About appearing on the Aussie TV show Young Talent Time in the 1980s, she added: 'I had big hair, it was huge.
'I think I'm slightly responsible for the hole in the Ozone Layer about Australia.'
Talking about Kylie, she said: 'My sister's much more trouble than I am. She's the naughty one!'
Dannii was presented with a cake during the interview to mark her 39th birthday.