B737 Captain reported ATC issued a 'low altitude alert' during visual final approach. The Captain corrected the unstable approach which enabled the flight to complete safe landing.

Narrative

While on approach. We initially planned and were told to expect RNAV visual tip toe XXL. We were vectored off star. Vectored in descent; and finally told to intercept localizer on heading; and cleared visual; maintain 160 we continued configuring at this time; and completed landing checklist. We opted to leave the Tip Toe RNAV XXL and drew an intercept course off of the FAP. We had the ILS freq in standby so we put the frequency in the active; and I verified the identifier; and armed the approach. I asked for the FAP ALT; and selected vertical speed -800 and followed the glide slope. I chose to hand fly the localizer intercept to make sure we didn't over shoot our path. Localizer / Glideslope never captured although we were on path. I turned off the flight directors and flew the visual using the localizer and GS as reference. At 1000 ft we made sure we were cleared to land; around 900 ft I noticed my descent was below glideslope and; made a small correction. At 800 ft GPWS announced 'Glideslope' I immediately started a momentary level to capture Glideslope ; and stated correcting. At this time ATC issued us an 'low altitude alert' we acknowledged. Before this correction we were 3 red 1 white on the PAPI; we continued approach and had a normal landing.