A CT scan showed Yao's injury not only failed to heal as expected but has got worse, Rockets physician Tom Clanton said.
"At this point, the injury has the potential for him missing this next season and could be career-threatening," Clanton said on the paper's website.
Clanton said he was trying to "make certain there is no option we are overlooking that would provide an earlier return or would be an option for treatment that he would prefer rather than doing additional surgery".
The 7-ft-6in (2.29m), 310-pound (140.6 kg) Chinese center could try to immobilise the left foot in the hope that the hairline fracture will heal on its own, Clanton said.
He added that because Yao had no pain or other symptoms there was reason to be optimistic that approach could work.
Yao, a seven-times NBA All-Star, fractured his foot during the Western Conference semi-finals against the Los Angeles Lakers on May 8.
He averaged 19.7 points per game and 9.9 rebounds this season.
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