He is seeking legal advice on whether the parole board was right to release Pistorius on house arrest after 10 months.
Masutha said a request for release was approved in June, only eight months into the sentence. "It is apparent therefore that the decision to release him on August 21, 2015, was made prematurely on June 5, 2015, when the offender was not eligible to be considered at all," the Justice Department said.
Masutha later defended his decision on television.
"It would be egg on our face if it turns out that actually we've misinterpreted the law. My starting point is upholding the rule of law."
A Justice Ministry spokesman was unable to say when the parole board would review the matter. Legal experts said Pistorius might have cause to dispute the decision.
The athlete was sentenced in October 2014 to five years for manslaughter after shooting Steenkamp dead.
The double-amputee is known as the "Blade Runner" because of his carbon-fibre prosthetics.
A petition filed by rights groups last week may have scuppered the plan to release him. "It is insensitive, especially with all the problems we have here with violence against women, " said Jacqui Mofokeng, spokeswoman for the ANC Women's League.
Steenkamp's family held a beachside ceremony in their hometown of Port Elizabeth to mark her birthday.
A member of the Pistorius family said they were "shocked and disappointed" that he would not "be home" today.