Speaking only days after the Swiss football boss visited St Petersburg to preside over the draw for Russia's 2018 World Cup, Putin said that Blatter, along with the heads of other international sporting bodies such as the International Olympic Committee, deserved “special recognition”.
“If there is anyone who deserves the Nobel Prize, it's those people,” he told the Swiss TV station RTS.
In the interview, Putin dismissed the ongoing investigations into widespread bribery within Fifa, led by US, Swiss and other law enforcement agencies.
“We all know the situation developing around Mr Blatter right now. I don't want to go into details but I don't believe a word about him being involved in corruption personally,” he said.
Some of Fifa's most senior officials have been indicted, but so far Blatter himself has not been touched and he claims not to have been involved.
Nonetheless, he resigned as Fifa president in June under growing international pressure.
The 79-year-old has long been suspected of coveting a Nobel Peace Prize.
He has played a central role in the Handshake for Peace collaboration launched with Norway's Nobel Peace Centre, an offshoot of the Norwegian Nobel Committee, in 2012.
The Nobel Peace Centre discontinued the collaboration in June within days of Blatter's resignation.
The bribery investigations into Fifa have cast a pall over Russia's winning bid to host the 2018 World Cups, leading Putin, along with much of the Russian media, to interpret them as politically driven.
In his RTS interview Putin noted that Britain had also bid to host the World Cup in both 2018 and 2022.
“The way there is this fight against corruption makes me wonder if it isn't a continuation of the bids for 2018 and 2022,” he said.