The ex-Labour leader, who was in power from 1997 to 2007, was given the title as the New Year's Honours were awarded.
He said: “Most people will agree that there are many more deserving people of this award than Tony Blair and there is a reason why he has waited more than 14 years for it.
“I would say he has done very well financially from his time in politics and that should be enough reward for a man who is now deeply unpopular in places like Ashfield."
Mr Anderson’s opinion comes as more than 700,000 people nationally have signed a petition calling for the former Prime Minister to have his knighthood removed.
He added: “People will be looking at this and thinking the Honours system needs reforming and I agree.
“I am not a big fan of the system to be honest. I do not understand why pop stars and footballers get these awards.
“The awards should be for ordinary people doing extraordinary things.”