Algerian Foreign Minister Abd Al-Aziz Bilkhadim told reporters after three days of talks in Cairo the document also raised the question of an independent judiciary and the status of women in the Arab world.
"The most important features of the draft declaration are that it asserts the need to develop the Arab system of government, civil society ... [and] the practice of democracy."
Arab League documents have rarely if ever called for internal political changes inside member countries, which the league has traditionally considered a domestic matter.
The last summit in March was called off by the Tunisian government, saying that some countries were not being progressive enough about reform.
The Tunisians said they specifically wanted the summit to endorse democracy, civil society and the rights of women.
However, many human rights organisations dispute Tunisia's commitment to these goals, saying it is among the more repressive Arab countries.
In a separate document approved by the ministerial meeting, foreign ministers said Arab governments were committed to comprehensive political, economic, social, cultural and educational reform for the sake of development.
It said the governments would "reinforce the spirit of citizenship and equality, expand the field of participation in public affairs and support freedom of responsible expression".
The document also mentions human rights and the role of women and said that was "in conformity with our beliefs, values and cultural traditions".
It does not mention democracy.