"We are not ready to call the mission over," said Grunsfeld, adding that scientists are still going to try and figure out how to get the wheel restarted.
The problem was discovered on Tuesday, when the spacecraft went into a pre-programmed safe mode that kicks in "if the observatory has trouble knowing where it should point", said Grunsfeld.
The telescope, the cornerstone of a $600m mission, was launched in 2009 to search for Earth-like planets.
The Kepler space telescope revolutionised the study of so-called exoplanets, with discovery of 130 planets orbiting distant stars and 2,700 potential planets, including a handful that may be habitable worlds, still awaiting confirmation.
NASA said the spacecraft lost the second of four wheels that control the telescope`s orientation in space.
Over the next few weeks, engineers will try to repair the wheel or find another solution.
In orbit around the sun, 40 million miles from Earth, Kepler is too far away to send astronauts on a repair mission like the way Grunsfeld and others fixed a mirror on the Hubble Space Telescope.
Engineers and scientists will also assess if Kepler could be used for other types of astronomical observations which do not require such precise pointing.
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