Putin told a Friday gathering at Rostov-on-Don the party "must gain the status of a public movement," RIA Novosti reported.
He created the All-Russia People's Front in May 2011 but has just begun developing its concept. When he created the party, Putin said he wanted it to function as an umbrella movement for members of trade unions, non-governmental organizations, business associations and youth groups.
"We have worked out an intense but realistic timetable for the modernization of the main aspects of our lives, and the main aspects of our economic development," Putin said.
He proposed conducting the party's founding congress in mid-June.
Putin's renewed interest in the All-Russia People's Front has prompted conjecture that leaders may be trying to create a new "party of power" to replace the ruling United Russia, which has been hit by corruption scandals recently, RIA Novosti said.
Putin told party activists he will revive a Soviet-era award.
"In the Soviet Union, we had the 'Hero of Socialist Labor' title, and in my opinion it was justified," Putin said.
The award, shelved for nearly 20 years, was established under Josef Stalin and used to honor and recognize civilian workers.
Putin said his time with the Russian spy agency, the KGB, taught him not to surreptitiously listen to conversations.
"It's bad to eavesdrop," Putin said. "I learned this from my time in the KGB. [And] I gave it up."
Putin spent 16 years in the KGB. He served in Dresden, East Germany, from 1985 to 1990.