Prince Ali of Jordan, Dutchman Michael van Praag and Jerome Champagne are also would-be presidential challengers.
Blatter has been Fifa boss since 1998 and intends to run for a fifth term.
"Football has given me so much during my life and I want to give something back to the game," said Figo.
"I look at the reputation of Fifa right now and I don't like it. Football deserves better. In recent weeks, months, and even years, I have seen the image of Fifa deteriorate.
"As I speak to many people in football - to players, managers and association presidents - so many of those people have told me that something has to be done."
All potential candidates have to register their interest in standing before Thursday's deadline.
Chelsea boss and compatriot Jose Mourinho
| "Luis Figo's candidacy is a great step forward for football. His career over many years grants a better future for Fifa. I believe in his character and determination, as well as his passion for the game. He will be a president focused on football and its general improvement, acting closely with all federations." |
According to Fifa electoral committee member Dominico Scala, all confirmed challengers must pass an anti-corruption test.
Figo played 127 times for Portugal and won the Champions League with Real Madrid in 2002.
He also won the Ballon d'Or in 2000 and was Fifa World Player of the Year in 2001.
In 2000, he made a controversial move from Barcelona to bitter La Liga rivals Real Madrid for a then world record fee of £37m.
Figo was one of Real Madrid's Galacticos, alongside the likes of Roberto Carlos, Ronaldo and Zidane
Figo is married to Swedish model Helen Svedin