The FIFA president has promised to enforce tougher sanctions after another episode of unsavory behavior from supporters in Europe.
Brazilian defender Paulao was sent off in Sunday's 4-0 defeat to Sevilla and television images showed a small section of supporters making monkey chants at the player.
The incident is the latest in a string of recent controversies in European football, with Manchester City midfielder Yaya Toure singled out for racist abuse by CSKA Moscow fans in a Champions League clash in October.
UEFA has ordered the partial closure of the Russian club's stadium for its game against Bayern Munich on Wednesday, but FIFA president Blatter says the time has come to enforce harder hitting sanctions.
"Sickened to learn of 'fans' racially abusing a Real Betis player," the 77-year-old wrote on Twitter.
"I condemn their actions, which were seen on TV/online by millions," the Swiss added. "FIFA's members approved a resolution at congress in May to tackle discrimination. It's time for tougher sanctions."
Football's world governing body promised to issue a warning, fine and/or the playing of a match behind closed doors for a first or minor offense.
Any player found guilty of racism can expect to receive a minimum of a five-match suspension as well as a complete stadium ban.
Paulao, 31, revealed his dismay at the episode after the game and called for the authorities to take a firm stance against the offenders.
"My family, in Brazil as well as here in Spain, are sad and worried," he told reporters. "When I left the pitch I was only upset about the sending off and I did not notice, although my friends told me about it later.
"It's good that this gets a lot of publicity so that action can be taken. We are all the same. Skin color changes nothing."