The 67-year-old president of the Royal Dutch Football Federation (KNVB) and former Ajax Amsterdam chairman is an outspoken critic of Blatter and said he was "very worried" about the state of soccer's scandal-plagued governing body.
The KNVB, which announced Van Praag's decision on its website, said he already had the backing of five national associations which is needed to mount a challenge.
Former FIFA deputy secretary general Jerome Champagne and Prince Ali Bin Al-Hussein of Jordan have already declared their intention to run and challenge incumbent Blatter at the May 29 election in Zurich.
So too has former France international David Ginola, in what is widely regarded as a publicity stunt.
Van Praag's decision, three days before the deadline for candidates to confirm their bids, is a potential blow for Prince Ali who had been backing on UEFA's support.
However, UEFA did not immediately promise support for any of the candidates.
"UEFA believes there should be an open and public debate about the future of FIFA, we believe it would be positive for football if credible candidates seek nominations," secretary general Gianni Infantino told a news conference.
"There is no candidate of UEFA, as a matter of fact because UEFA has no vote."
"From now until May 29, there must be an open debate, a public debate about the future of football, and on May 29, each association will decide according to their conscience," said Infantino.
Van Praag has been KNVB president since 2008 and was chairman of Ajax from 1989 to 2003, during which time they won the UEFA Cup and European Champions League.
His father Jaap was Ajax chairman from 1964 to 1978, during which they won three successive European Cup titles.
Van Praag, described by UEFA's website as a musician who plays the drums, piano, vibraphone and tuba, was taking part in a UEFA executive committee meeting as the KNVB announced his decision. However, he did not speak to reporters at UEFA headquarters.
"It is well known that I am very worried about FIFA," said van Praag on the Dutch FA website. "It is high time that the organisation is fully normalised and puts its full focus back on football.
"For a time, I hoped that there would be a credible opponent, but that's simply not happened. Then you must not only use words but also act decisively and take responsibility. Therefore I present myself now as a candidate."
Van Praag launched an outspoken attack on Blatter last year during the FIFA Congress in Sao Paulo.
"Mr Blatter, this is nothing personal, but if you look at FIFA's reputation over the last seven or eight years, it is being linked to all kinds of corruption and all kinds of old boys' networks things," he said.
"FIFA has an executive president and you are not making things easy for yourself and I do not think you are the man for the job any longer."
(Writing by Brian Homewood in Berne, editing by Pritha Sarkar)
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