The actor, 91, was diagnosed with age-related macular degeneration (AMD) in 2012, which has made it difficult for her to recognise people's faces.
Dame Judi told BBC Radio 4: "I can't be on stage. I can't do a play any more. I can't do a film any more. I can't read any more.
"I go up to lots of the wrong people and give them a hug and say, 'Oh sorry, didn't realise'."
Addressing interviewer Emma Barnett, Dench said: "I can't see your face at all."
The James Bond star also expressed sadness at not being able to see bluebells in the summer, saying: "They said this summer was absolutely sensational with bluebells; I couldn't see one.
"But I know what my trees look like, and part of it is in my memory and part of it is about hopefully what I can make out."
Dench previously told how she stopped driving a few years ago because of her deteriorating eyesight.
She told Radio Times: "A couple of years ago I stopped driving, which was one of the most traumatic moments of my life. It was absolutely appalling.
"But I just know I'll kill somebody if I get behind the wheel of a car now."
AMD is a common condition and does not cause total blindness, but it can make reading and recognising faces difficult.
Dench, whose career spans seven decades, has won various awards including an Oscar, two Golden Globes and six BAFTAs, and was made a dame in 1988 for her services to acting.
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