Putin spoke during a ceremony in the Kremlin's sumptuous St George's Hall to bestow awards on servicemen who fought in Syria, with the military's top brass among some 700 personnel from the armed forces in attendance.
"If there's a need, Russia literally within several hours can ramp up its presence in the region to the size required for the unfolding situation and use the whole arsenal of possibilities we have at our disposal."
"We would not want to do that, a military escalation is not our choice," he added.
"And that's why we put our hopes in the common sense of all parties, in the commitment to the peace process of both the Syrian authorities and the opposition."
On Monday, Putin ordered the surprise withdrawal of most of armed forces from Syria, saying Moscow's task had been "on the whole" completed.
He said Moscow was not abandoning its ally Bashar al-Assad, pledging Russia's continuing military, financial and other support to his regime and praising the Syrian leader.
"We see his restraint, his sincere desire to achieve peace, his readiness for compromise and dialogue."
Moscow is set to maintain its air and a naval facility in Syria and Putin indicated that Russia's drawdown would not significantly change the balance of forces in Syria.
Putin said Moscow would keep its advanced S-400 air defence systems stationed in the war-torn country and warned its forces would shoot down "any target" they considered a threat.
He added that he was certain that the "patriotic forces" fighting jihadists would score new battlefield triumphs in the near future.
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'Opened path to peace'
The Russian leader also extolled the country's armed forces for their service in the Middle Eastern country.
"It is you -- the Russian soldiers -- who opened the path to peace," he said, adding that the five-and-a-half-month Syria campaign allowed Russia to test its weapons on the battlefield.
Pro-Kremlin observers hailed the Syria campaign which they said helped Putin break out of international isolation over Ukraine and assert Russia's interests in the Middle East.
But critics charge that Putin's foreign policies have sunk Russia into an economic quagmire, with support for Ukrainian rebels and the Assad regime diverting finances from medical care, education and science.
Putin pledged that "attention to economic development in difficult conditions" was a top government priority.
Many analysts argue the danger of a costly protracted war similar to the Soviet Union's 10-year involvement in Afghanistan was not lost on the Kremlin, with Putin deciding to pull the forces out amid a relative lull in fighting and peace talks.
Putin said the bulk of the bombing campaign in Syria had been covered by the defence ministry, which earlier earmarked 33 billion rubles ($481.5 million) for drills.
"We simply redirected these resources to secure our presence in Syria."
Attending the ceremony were relatives of four Russian servicemen who perished while on combat duty in Syria, including the pilot of a warplane shot down by Turkey.
Observers say that Russia's operation in Syria seems a world away from Moscow's apparent involvement in Ukraine where the Kremlin denied it had sent troops.
Unlike servicemen who fought in Syria, those who took part in the Ukraine fighting largely remained unsung: they received awards behind closed doors while those who died were buried in secret.