The despot went on to add that his former-chef-turned-number-one-enemy was a 'talented businessman' and that the Kremlin would be launching a 'preliminary investigation' into the tragedy.
While he spoke in the past tense, and paid tribute to the 62-year-old warlord, he fell short of officially confirming Prigozhin's death.
It still remains unclear exactly what happened to the jet that fell from the sky and burst into flames yesterday afternoon but US officials now believe it had been caused a surface-to-air missile.
Washington insiders, who spoke only on condition of anonymity given the sensitivity of the matter, stressed that the information was still preliminary and under review.
Their assessment contradicts that of several independent Russian outlets, who argued the explosion was likely caused by a bomb placed on board.
Putin has now allegedly ordered a probe by the country's Investigative Committee, who have been reporting to him following the smash.
He said that the team had begun a 'preliminary investigation of this incident, and it will be conducted fully and completed' shortly.
The Kremlin remained silent on the tragedy for almost 24 hours, other than a notification from the Russian aviation authority, who claimed Prigozhin and his co-founder had been passengers on board the flight.
Finally speaking out over the aircraft crash, Putin said this afternoon: 'What concerns this air crash, first of all, I want to express sincere condolences to the families of all those who died.
'It is always a tragedy. Indeed, if they were there and, according to the initial information, Wagner Company employees were on board, I want to note that those people made a significant contribution to our common cause of fighting the Nazi regime in Ukraine.
'We remember this, we know this and we will not forget this.'
Putin has often made claims of the presence of neo-Nazis in Ukraine as a way to justify his horrendous war - but these theories have been debunked.
In his address he added: 'I had known Prigozhin for a very long time, since the start of the '90s.
'He was a man with a difficult fate, and he made serious mistakes in life. And he strove for the results he needed for himself, and when I asked him about it, for the common cause, as in these last months.
For much of the day, it appeared as though Putin would once again turn a blind eye to Prigozhins death.
This morning, while addressing leaders at the BRICS summit, he avoided the matter.
Instead, the Russian leader spent time congratulating South African president Cyril Ramaphosa on the announcement that six countries - including Iran and Saudi Arabia - will join the economic alliance next year. Similarly, as news broke last night, there was no mention of the fatalities.
Instead, he soaked up adulation at a concert celebrating the 80th anniversary of the Soviet Union's Second World War victory at the Battle of Kursk.
A clip showed the moment the despot greeted a raucous crowd who screamed 'we are with you, we love you', before a woman dressed in a pink jacket cried: 'Vladimir Vladimirovich [Putin], my favourite,' and planted an enthusiastic kiss on his face.
A day has now passed since the incident but questions still remain over what truly happened to the flight fell from the sky into a field in the Bologovsky district in the Tver region, 60 miles north of Moscow, before bursting into flames.
Russian outlet Baza, publishing schematics of the plane, pointed to a service compartment near the bathroom in the tail section of the aircraft behind the wings represented an ideal place to conceal a bomb.
It contended the theories that Prigozhin's Embraer Legacy 600 jet was shot down by an air defence missile are likely false, pointing out there were no visible rocket contrails or exhaust plumes in the skies around the crash site.
And eyewitnesses from the town of Kuzhenkino close to the location of the crash said they saw the jet explode in the sky before tumbling to the earth, but did not report any missile strike.
Kuzhenkino resident Anastasia Bukharova, 27, said she was walking with her children Wednesday when she saw the jet, 'and then - boom! - it exploded in the sky and began to fall down.'
'Something sort of was torn from it in the air, and it began to go down.'
Stewardess Kristina Raspopova, who perished in the crash, told family prior to takeoff from Moscow's Sheremetyevo airport that the flight had been delayed due to a technical inspection and unspecified repairs, according to several independent Russian outlets.
It comes as several Russian sources claimed Prigozhin's usual pilot - Artem Stepanov - was on holiday in a remote region of Russia and was uncontactable prior to yesterday's incident.
But the plane's pilot and captain Aleksei Levshin, who also died in the crash along with co-pilot Rustam Karimov, had also worked with Prigozhin for many years, his daughter told Russian media.
Meanwhile, Russian media outlet rucriminal.info - a site that seeks to expose the corruption and underhand tactics utilised by Moscow's elite - claimed that Prigozhin's plane was delayed before takeoff for 'technical inspections', adding to speculation the aircraft was targeted by a bomb.
UK intelligence sources told the earlier today BBC they had reason to suspect Russia's domestic security service, the FSB, was behind the plane crash.
But Prigozhin's death has not yet been officially confirmed, leading to speculation the Wagner chief may still be alive.
Wagner Group mercenaries are now gearing up for 'full mobilisation' amid news Prigozhin, as well as Wagner co-founder Dmitry Utkin, were killed in the plane crash.
Russian outlet Readovka, closely linked with Prigozhin, reported that the private military company had a 'long-established approved mechanism of action in the event of the death of Yevgeny Prigozhin or Dmitry Utkin'.
A source confirmed: 'In the event of Prigozhin's death, there is a mechanism for ''full mobilisation'' – regardless of who was at fault for his death.'
The extent to which Wagner mercenaries will react to the death of their leader remains to be seen.