"The Swiss high court recently confirmed that we can order point deductions, relegations and expulsions," Blatter was quoted as saying in an interview with Swiss weekly SonntagsZeitung.
FIFA wanted these sanctions to be used more frequently, Blatter said. He did not elaborate.
FIFA has said that a ruling early February by the Swiss high court which rejected a Spanish club's appeal backed its authority to intervene where necessary, reports AP.
"We intervene against any kind of discrimination, against racism as well as against political and religious extremists," Blatter said. "But we can only act within the limits of our constitution."
FIFA was not responsible for public security, Blatter said, and domestic soccer associations should cooperate with state authorities.
Blatter also said he received US$1 million from FIFA in 2006.