Addressing a group of Japanese business leaders in Tokyo on Thursday, Schroeder said it would be wrong to continue with a two-tier council.
He said: "That means that they [new members] should have a veto right as well as the Permanent Five."
Germany, Japan, India and Brazil have launched a joint bid for permanent seats in the UN's most powerful body. Schroeder said he also wanted to invite two African nations, which he did not name, to seek Security Council seats.
The US has only explicitly backed Japan's bid but has not committed to giving it the power of veto. France and Russia have called for all new permanent council members to enjoy full veto rights.
A leading opponent of the Iraq invasion, the German chancellor is also due to meet with Japanese Prime Minister Junichiro Koizumi - a staunch defender of the US-led invasion.
Despite their differences over the war, Schroeder said Japan's troop deployment in Iraq and Germany's own peacekeeping role in Afghanistan showed Tokyo and Berlin had a "broad understanding".
But he also pointed out: "We cannot only guarantee security with military means. There is always the aspect of social, economic and cultural security."
He said the election set for January would be "crucial" for Iraq's development.
"Germany and Japan know that and are therefore ready to support the election process in Iraq," he said.