The prime minister said he thought a change could be needed to send a "clear signal" the government was on the side of the "victim not the offender".
He pledged to consult on the issue with police, prosecutors and law officers.
But Tory leader Michael Howard accused Mr Blair of jumping on his party's "bandwagon" over the issue.
Currently householders are allowed to use "reasonable force" to defend themselves and their property against intruders.
But the Tories have unveiled plans to change the law with a private members' bill so householders would not face prosecution unless they used "grossly disproportionate" force in self defence.
Mr Blair told MPs: "In the light of recent concern, it is worth looking at whether we don't have to clarify the law so that we send a very, very clear signal to people that we are on the side of the victim not the offender."
But he added that even though the number of cases in which a person would be convicted after taking on a burglar in their own home was very small he would consult and bring forward proposals to tackle the issue.
Mr Howard said he was pleased the government had responded favourably, but accused Mr Blair of being "Mr Bandwagon".
To Labour jeers he said: "Once again where we lead, you follow."
He then pushed Mr Blair over why the lord chancellor had this week said the law did not need to be changed.
But Mr Blair countered that Home Secretary David Blunkett had said he was prepared to review the law on this issue "a couple of months ago".
He told Mr Howard: "You only jumped on the bandwagon when you thought there was something in it.
"However, I would have thought we could deal with this perfectly sensibly."
But Mr Blair did acknowledge that the Law Commission had looked at the issue and reported that the law did not need to be altered.
The change of heart follows Metropolitan Police Commissioner Sir John Stevens' assertion that people should be allowed to use what force was necessary, without risking prosecution, when tackling intruders.
How long has it taken to figure that one out... about time!