Putin showed "extraordinary feat of leadership in taking a country that was in chaos and bringing it stability," said Richard Stengel, Time's managing editor.
This year's honor was a return to the magazine's tradition of picking an individual rather than last year's choice of anyone creating or using content on the World Wide Web.
Previous winners have also included Bono, President George W. Bush and Amazon.com CEO and founder Jeff Bezos.
The discovery of the submarine has unveiled a few "inconsistencies." For example, how can one explain the fact that the sub was found where it needed to be searched for from the start?