Putin's remarks, to rows of uniformed officers and defence officials, reflected increasing hawkishness since he returned to the Kremlin for a six-year term last May, and a growing readiness to cite foreign threats and use anti-Western rhetoric to rally support.
"Attempts are being made to tip the strategic balance," said Putin, who as president is commander-in-chief of the armed forces, told his audience at the General Staff academy on Moscow's outskirts. The head of the Russian Orthodox Church, Patriarch Kirill, sat in the front row.
"Geopolitical dynamics call for a quick and considered response ... Russia's armed forces must move on to a new level of capabilities in the next three to five years," said Putin, who has not ruled out seeking another term in 2018.
The former KGB spy said moves that threatened Russia's geopolitical position included the eastward expansion of Russia's former Cold War foe NATO and US deployment of an anti-missile shield in Europe.
He said drills must be sharpened up and held with less advance warning, to keep soldiers on their toes.
"Combat training must not be laid-back, so that soldiers know about emergency exercises six months in advance, but must be as similar as possible to the real conditions of modern combat and warfare," he said.
Following a decade of military spending cuts after the collapse of the Soviet Union in 1991, Putin has been the driving force behind plans to spend 23 trillion roubles ($750 billion) through 2020 to upgrade Russia's ageing armaments.
SOVIET-ERA INFRASTRUCTURE
Russia's military, with roughly 1 million servicemen, is still largely reliant on Soviet-era infrastructure and weaponry. It continues to rely on conscription, despite Kremlin pledges to turn it fully professional.
Rights activists say brutal bullying has been rampant since the collapse of the Soviet Union, and the military has long been plagued by corruption. The top military prosecutor said in 2011 that a fifth of the budget was stolen or embezzled.
Former defence minister Anatoly Serdyukov set out ambitious military reforms in 2008, after Russia fought a brief war with Georgia that highlighted the failings of the armed forces.
But Serdyukov was sacked in November, and is now a witness in a criminal case in which a former subordinate is accused of fraud and embezzlement in deals involving Defence Ministry property.
Defence Minister Sergei Shoigu, the ally Putin named to replace Serdyukov, said on Wednesday he would make an inventory of army property to try to reduce corruption, widely seen as the main obstacle to modernisation.
Shoigu also said Russia needs warships in the Mediterranean at all times "to protect its national interests".
Russia has a modest naval maintenance facility in the Syrian port of Tartous that is its only military base outside the ex-Soviet Union, but it does not have a constant presence in the Mediterranean.
Putin has repeatedly evoked foreign threats since returning to the presidency as he tries to lift his ratings following the biggest protests since he first rose to power in 2000.
He has accused the United States of backing the protests against him, and Russia has introduced a law since his return to the Kremlin that forces campaign and lobby groups that are funded from abroad to register as "foreign agents".
Putin has also increasingly underlined traditional Russian values and taken a tough line against the protesters in an attempt to rally support among the conservatives who have long been his power base.
Relations with the United States have deteriorated over Washington's missile defence plans and American concerns about political freedom in Russia, as well as trade disputes.