He said the West must be prepared to face down the “looming challenge” of dictator Mahmoud Ahmadinejad.
He also accused the country of funding terror in the Middle East and doing everything it could to stop the region from developing peacefully.
He said Europe and the US needed to drop its “wretched posture of apology” and get on the front foot.
“I am out in the region the whole time, I see the impact and influence of Iran everywhere,” he said.
“This is not because we have done something. At some point the West has got to get out of this wretched posture of apology for believing that we are responsible for what the Iranians are doing. We are not.
“They will carry on doing it unless they are met by the requisite determination and, if necessary, force.”
Mr Blair also said Iraq might now be engaged in an arms race with Iran if Britain and the US had chosen to step back from war in March 2003.