Yeah, a tiller will do the job. Be aware that you'll have to reseed the grass afterwards, which means you'll be cultivating mud for a year or so and it'll be 2-3 before the grass comes in thick enough to really look right, as it were. The result however, should be a nice flat, level lawn and if you reseed well it should come up quite lush as well.
Normally I'd say to plant any perennials you want at the same time, since the soil will be nice and loose after the tiller does it's thing, but given that it's so late in the season you're just going to have to hold off until next year.
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I wake up in the morning more tired than before I slept
I get through cryin' and I'm sadder than before I wept
I get through thinkin' now, and the thoughts have left my head
I get through speakin' and I can't remember, not a word that I said
- Ben Harper, Show Me A Little Shame
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