However, many of Bush's actions after the 9/11 attacks, such the establishment the Guantanamo Bay prison camp and the approval of harsh interrogation methods used on al-Qaeda suspects have led to widespread criticism of his administration.
The US leader, whose term in office ends on January 20 when Barack Obama is sworn in to office, defended the invasion of Iraq.
"Iraq has gone from a brutal dictatorship and a sworn enemy of America to an Arab democracy at the heart of the Middle East."
Bush, who leaves office as one of the most unpopular presidents in US history, also admitted to unspecified "setbacks" and things he "would do differently" today as he attempted to define his presidency by the US response to the September 11 attacks.
"While our nation is safer than it was seven years ago, the gravest threat to our people remains another terrorist attack," he said.
Al Jazeera's Rob Reynolds said the speech did not mention Osama Bin Laden, the al-Qaeda leader who remains at large, or Iraq's missing weapons of mass destruction.
|The US leader famously declared the war in Iraq virtually over in 2003 [AP]
Bush also defended his economic record and in particular the $700bn bailout of Wall Street firms earlier this year in attempt to stave-off a financial crisis.
"Facing the prospect of a financial collapse, we took decisive measures to safeguard our economy," Bush said from the White House.
"The toll would be far worse if we had not acted."
The US leader also offered praise to Barack Obama, as "a man whose story reflects the enduring promise of our land".
Bush hands over to Obama with ongoing wars in Iraq and Afghanistan, a deadly Israeli offensive in Gaza, a US economy deep in recession and a US image damaged over rights abuses in prisons such as Abu Ghraib in Iraq.