The 34-year-old collapsed during his team's ITM Cup semifinal against Counties Manukau at Pukekohe on Saturday, but he is showing positive signs on the road to recovery.
MacDonald came out of an induced coma last night and was acknowledging questions and recognising people around him, the New Zealand Rugby Union said.
Rugby Southland chief executive Brian Hopley said MacDonald was improving.
"We are delighted to report that Hoani Macdonald has continued to improve overnight, and today will be be moved from the ICU at Middlemore Hospital to a coronary care ward.
"Hoani has sent his thanks to everyone who has shown support for him and his family over the past two days," Hopley said.
MacDonald was understood to have "flatlined" twice after he fell to his knees and had a seizure minutes before half time during Saturday's game.
Pukekohe Volunteer Fire Brigade's senior station officer Graeme Wilson said MacDonald was talking to the team doctor when he had a fit and fell unconscious.
His condition deteriorated rapidly and he went into cardiac arrest just minutes after being taken from the field on a stretcher.
"It was pretty scary and definitely life-threatening for a while," Mr Wilson said.
Ambulance officers used a defibrillator on MacDonald after CPR and a shot of adrenaline failed to bring back his pulse.
Yesterday, Southland head coach David Henderson said: "As coaches, we knew he was in some serious trouble before half time."
They had tried to shield the team to stay focused on the game so the medical team could do their work and play could continue.
Mr Hopley earlier spoke of the shock to the Southland rugby community.
"It is a shock to all of us. We are a small, tight-knit community and I think it has hit everyone pretty hard," Mr Hopley said.
"We are making sure that we support the family and we have people in place for counselling and support for the players."
New Zealand Rugby Union general manager professional rugby Neil Sorensen said MacDonald's family had ''expressed thanks for the massive outpouring of love and support from the New Zealand public''.
"The family have asked for continued privacy through this testing time."
MacDonald's fiancee, Michelle Notman, his two sons and mother had flown from Invercargill on Saturday night.
Highlanders general manager Roger Clark said it was a shock.
"We are thinking of Hoani and his family and giving them as much support as we can. We just hope he comes through OK," Mr Clark said.
"He is always a very fit man, who came back into the side this year when a few of our locks went down."
MacDonald first played for the Highlanders in 2004 and played through to 2008.
He then went overseas, playing club rugby in Wales before heading to Melbourne to play for the Rebels in their inaugural year.
Last season with Jarrad Hoeata injured, he was brought back into the Highlanders wider training squad and then joined the full squad midway through the season because of injuries to other players.
He played two games, coming on against the Bulls and starting against the Blues.
