Mr Blair narrowly won the House of Commons vote 315 to 277, after accusing the opposition of trying to dilute and weaken the laws.
The lower house knocked down amendments to the Terrorism Bill -- made by the upper House of Lords, which Mr Blair claimed watered down the most important piece of anti-terrorism legislation in years.
The main opposition Conservatives and Liberal Democrats opposed the measure, which now awaits royal assent, citing civil rights concerns and arguing that current laws could do the job just as well.
"Parliament has now sent out a very strong signal -- it is not merely people who engage in acts of terrorism, but those who incite acts of terrorism or who glorify terrorism," Mr Blair said.
Banning the glorification of terrorism has been a key plank of Mr Blair's effort to give police and prosecutors tougher tools to confront terrorism in the wake of the July 7, 2005 attacks on three London subway trains and a double-decker bus.
Fifty-six people died, including four suicide bombers, in what was the biggest single violent loss of life on British soil since World War II.
The prime minister used his speech at the United Nations General Assembly last September to appeal to other nations to outlaw those who praise or celebrate acts of terrorism.
Passage of the Terrorism Bill came a week after Abu Hamza al-Masri, the Egyptian-born former imam at Finsbury Park mosque in north London, was sentenced last week to seven years in prison for inciting racial hatred and soliciting murder.
The bill had stirred up controversy at every turn during its way through parliament.
Last November the Commons rejected Mr Blair's wish for the legislation to allow police to hold a terrorism suspect without trial for up to 90 days, opting instead for a compromise 28 days.
It was the prime minister's first defeat in parliament since he took office in 1997, raising questions about his authority.
The glorification clause did clear the Commons in November 2005, when the Terrorism Bill was going through its second reading, but only by 17 votes after 27 members of Mr Blair's own Labour Party voted against it.