The US is activating a missile defence system in South Korea and tightened sanctions against the North in April.
He said he would discuss co-hosting at the Masikryong ski resort with Jang Woong, North Korea's delegate to the IOC.
"We are now reviewing all the ideas put forth by the government and we look forward to discussing this with the International Olympic Committee during their next visit", said Nancy Park, a Pyeongchang 2018 spokesperson.
This follows reports that South Korea's new president, Moon Jae-in, has suggested the two countries lead a north-east Asian bid to host the 2030 FIFA World Cup.
South and North Korea are still formally at war, as no peace treaty was ever signed after the Korean War of 1950-1953.
Speaking after the test, Moon said while he prefers dialog with Pyongyang, such a stance is only possible "if we have strong defense". The country may ask for a little help, too: from North Korea.
South Korea is of course dominant in short track.
In a commentary Friday, North Korean state-controlled newspaper Rodong Sinmun said that if South Korea pursues peace with the North, it should "stop all hostilities", including sanctions.
Participation in Pyeongchang could "provide a turning point for the reconciliation between the South and North", Moon said.
This year, the two countries joined together for a women's soccer's game in Pyongyang and a women's hockey tournament in South Korea.
Last month, Christophe Dubi, the IOC's executive director for the Olympic Games, claimed the organisation are monitoring the situation on the Korean peninsula prior to Pyeongchang 2018.
John Delury, a professor at Yonsei University's Graduate School of International Relations, said the games were an appropriate venue to at least try to mend ties.