Seeking urgent steps to restore order in the war-ravaged country, Putin said a final decision however rested with the Security Council.
"Regarding the possible participation of international forces in Iraq under US command, we dont see anything wrong with this," Putin told reporters while holidaying in Italy.
The Russian president however did not say whether Moscow would be willing to send its own troops to Iraq as part of such a multinational force.
Earlier during the day, Putin had said that Moscow had drawn up a new draft resolution for the UN on post-war Iraq.
The new resolution was aimed at broader international participation in rebuilding the war-torn country and could help form a new Iraqi political leadership and facilitate democratic elections, he said.
"We have prepared a rough version of a draft UN resolution," Putin said.
"I have discussed this with German Chancellor Gerhard Schroeder and Russian Foreign Minister Igor Ivanov has spoken to his US counterpart Colin Powell. Our positions on this are getting closer," Putin explained.
"Regarding the possible participation of international forces in Iraq under US command, we dont see anything wrong with this"
Though long opposed to the idea of a UN-sponsored multinational force in Iraq, Washington has recently softened its position as it seeks support from other nations in enforcing order in turbulent Iraq.
Russia, Germany and France had all opposed the US-led war and currently the three countries favour a larger role for the UN in Iraq.
"The United Nations did not support the war in Iraq and is not responsible for its consequences, but it wants to help the Iraqi people," Putin said.
"It is true that the United States is suffering considerable moral and financial losses in Iraq and there is a need to join forces to find a way out of this crisis," Putin added.
Having toppled Saddam Hussein, the US finds itself in a virtual quagmire in Iraq, with its troops suffering daily casualties.