US State Department spokesman Richard Boucher said in a statement on Wednesday that the new "contribution … will assist Iraq's transition to a secure democracy".
"Australia continues to demonstrate that it is willing to make difficult and courageous choices to promote democracy and combat terrorism around the world," Boucher added.
Prime Minister John Howard announced on Tuesday it would send an extra soldiers to make its total commitment 1400 troops.
But Howard did not receive much support for the decision in Australia but has shrugged off the criticism, saying he would not apologise for reversing an election campaign commitment.
"I do not apologise at all for the fact that the government has changed its position, I acknowledge that I'll be criticised for that," Howard told ABC radio from Perth.
"But in the end I've got to take decisions that I believe are right in the interests of this country and broader Western interests in the Middle East."
The decision to increase the Australian contingent was condemned by the opposition parties which accused the government of breaking an election promise and said Australia should be withdrawing troops rather than sending more.
Australian Greens Senator Bob Brown accused Howard of sending more troops to Iraq in a bid to boost the chances of an Australia-Japan free trade agreement.
Opposition Labor leader Kim Beazley said Howard should have stuck to his original position which was to support the initial effort in Iraq, and then return the focus to Australia's own region.
"The point we have reached in Iraq is a point that does not require their presence any further," Beazley said.