Blatter, the 75-year-old Swiss who has run FIFA since 1998, was voted in by an overwhelming majority, winning 186 votes of the 203 cast, and immediately pushed through changes intended the make the choice of World Cup hosts more democratic and beef up the fight against corruption.
"I'm a happy man after these very, very hard weeks," Blatter, who at the start of the day also defeated a proposal from the English FA to postpone the election, told reporters.
Minutes after his re-election, delegates approved his suggestion that World Cup hosts should in future be chosen by the Congress from a short-list prepared by the 24-man executive committee.
Under the current system, voting is restricted to the executive committee, which critics say leads to excessive lobbying and exchanges of favours.
Congress also accepted a proposal to strengthen the ethics committee by separating the investigation and decision-making powers and another to create a new watchdog called the "solution committee."
Blatter, the eighth president in FIFA's 107-year history, had been due to face Asian Football Confederation (AFC) president Mohamed bin Hammam but the Qatari withdrew on Sunday amid cash-for-votes allegations.
Bin Hammam was barred entry to the Congress hall, having been provisionally suspended by the ethics committee along with fellow executive committee Jack Warner.
"I will never accept how my name and my reputation have been damaged. I will fight for my rights," Bin Hammam said in a statement.
"I thank all the people who have supported me during the last weeks and will support me further."
Blatter himself was cleared of any wrongdoing during the electoral campaign by the ethics committee on Sunday.
"I wanted this Congress to know and understand that we are in a situation which needs not only words but action," said Blatter.
"I have been hit, I have been slapped but we are standing and we have created the necessary means to react."
"I'm not the best swimmer but I can take a ship safely to harbour," he added.
The European Club Association (ECA) joined the calls for Blatter to implement reforms.
"The recent happenings have once more proven that FIFA needs a change in its whole structure," chairman Karl-Heinz Rummenigge said.
"I request FIFA to immediately introduce democratic and transparent structures and procedures. European clubs will no longer accept that they do not participate in the decision-making when it comes to club related matters."
"We will closely follow FIFA's development in this respect in the future and take appropriate measures, if there is no improvement."
Blatter named former U.S. Secretary of State Henry Kissinger and ex-Dutch international Johan Cruyff as two personalities he would like to be involved with the committees in some capacity.
Looking relieved, Blatter said he would ask the solution committee to change the way in which the powerful executive committee, currently elected by the regional confederations, was chosen.
Blatter said he was surprised at the English proposal but said there would be no recriminations.
"There is no bad feeling against any of the associations that did not vote for me," said Blatter.
"I'm proud with 186 votes, those against me are also the members of FIFA and we take them all together."
The motion to postpone the election was rejected by 172 votes to 17, although the English proposal gained several more votes than originally expected.
Other delegates were less conciliatory and vice-president Julio Grondona of Argentina produced an astonishing atta
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.