"For me, Silvio was a dear person, a true friend. I have always sincerely admired his wisdom, his ability to make balanced, far-sighted decisions even in the most difficult situations," Putin said in a message of condolence.
Berlusconi will be remembered in Russia as a "consistent and principled supporter of strengthening friendly relations between our countries," he said.
Like former German chancellor Gerhard Schroeder, Berlusconi cultivated close relations with Moscow during Putin's first years in the Kremlin from 2000 onwards.
Berlusconi became personal friends of Russian leaders, but after Russia's annexation of Crimea in 2014, he drew much criticism for siding with Russia against the West.
Berlusconi drew condemnation just before Italy's election last year when he said Putin had been "pushed" into invading Ukraine months earlier and had wanted to put "decent people" in charge in Kyiv.
But Berlusconi later issued a statement saying: "The aggression against Ukraine is unjustifiable and unacceptable."
"A world-class politician, there are few such people in the international arena now," Putin said of the former prime minister in an interview with Russian television hours after Berlusconi's death on Monday. He also noted Berlusconi's role in forging dialogue between Russia and NATO.