The Senegalese midfielder was involved in a heated exchange with Atletico Madrid supporters after his side's 2-0 victory at the Estadio Ciudad de Valencia at the weekend.
Diop went to take a corner in the closing stages of the game, but referee Jose Gonzalez blew the final whistle before he could so and the 28-year-old kicked the ball into the section of away supporters.
The Levante man alleges that fans made monkey gestures at him, to which he responded by dancing in front of them.
UEFA reiterated on Monday that both the organisation and its president Michel Platini "strongly condemn" all forms of discrimination in the game.
Blatter added that he was "very angry" at the situation and suggested that clubs should face harsher punishments if their fans are found guilty of racism.
Speaking at the opening of a CAF Centre of Excellence in Mbankomo, Cameroon, he said: "Teams should be docked points or relegated."
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.