"South Africa is progressing well. We are working hand in hand with the South African Football Association and the now-founded organising committee," he said in Cape Town after announcing a sponsorship deal with Coca-Cola.
"I'm sure that the South African World Cup in 2010 will be a milestone not only for this country, for Africa but the world."
Local media have raised concerns over whether organisers can complete an ambitious upgrade of the country's weak transport system ahead of 2010 in time to cope with the hundreds of thousands of expected World Cup visitors.
Critics have raised the alarm over possible delays in building a 20-billion rand ($3.02 billion) high-speed train linking major cities Pretoria and Johannesburg known as Gautrain.
The Gautrain project forms a key part of ambitious plans to improve public transport, although it was not included in the winning bid proposal.
"The subject of transport is obviously linked with the choice of the venues, where the World Cup will be played and the number of stadia that will be used," he said.
"This is a crucial point. But before saying it will be a problem, let us identify the situation and if there is a problem, that problem will be resolved I'm sure."
Blatter said FIFA would set up offices in South Africa in 2006 and once next year's World Cup in Germany was complete, work for 2010 would move "into full swing".
He said he was confident that the event would prove to the world that an African country was capable of organising the World Cup. Blatter, 69, also said that he was prepared to stand for another term as FIFA president after 2007.
"There are two conditions to that: if I still have good health then I am available and the second one depends on the national associations."
"If they say 'yes, president you have done a good job but it is not yet finished, stay again' then I will do it," he said.