Obama also praised former Bill Clinton, the former president, who spoke earlier, as someone who reminds us about "what it's like when you've got a president who actually puts people first. Thank you president Clinton."
Biden, a Delaware senator and chairman of the Senate Foreign Relations Committee, had heaped praise on Obama during a keynote speech on Wednesday.
"He has tapped into the oldest American belief of all. We don't have to accept the situation we cannot bear. We have the power to change it," said Biden.
Bill Clinton, the former US president, had earlier also offered his backing to Obama's presidential bid.
"Barack Obama is ready to lead America and restore American leadership in the world," Clinton said at the Democratic National Convention in Denver, in his most robust endorsement yet of Obama.
Clinton said that Obama had "hit one out of the ballpark" when he chose Joseph Biden, as his running-mate.
Analysts said Biden's nomination could help the US forge a new foreign policy if the two are elected in November.
|Will Obama and Biden change
US foreign policy? [GALLO/GETTY]
Steve Clemons from the New America Foundation think tank told Al Jazeera:
"He not only wants to talk about military and security dimensions that are facing the United States, but wants to get back into building a new set of arrangements with the world.
"That may help return America to a position of being a pivotal player on everything from human rights to the spreading of democracy, but also just dealing with core interests of the world."
However, Stephen Zunes, a political analyst from the University of San Francisco warned that Biden had a mixed record.
"Joe Biden really discredited himself in a big way by pushing through the resolution authorising the invasion of Iraq."
Earlier, Obama and Biden had been officially selected as the US Democratic party candidates for November's presidential election after delegates at the party's convention approved his primary poll win by acclamation.
The historic endorsement at the Denver convention hall made the Illinois senator the first African-American to receive the nomination of a major US party.
Obama's former rival, Hillary Clinton, formally asked delegates to suspend a roll call vote of states and approve his nomination by acclamation.
"With eyes firmly fixed on the future, in the spirit of unity, with the goal of victory, with faith in our party and our country, let's declare together in one voice right here right now, that Barack Obama is our candidate and he will be our president," she said to roars of approval inside the packed convention hall.
"I move senator Barack Obama of Illinois be selected by the convention by acclamation as the nominee of the Democratic Party," she said, a request accepted by the convention's presiding official, Nancy Pelosi, the speaker of House of Representatives.
Pelosi then announced that Obama had accepted the nomination.