Mr Rees-Mogg, chairman of the influential Conservative European Research Group (ERG), said he still regarded the Prime Minister’s Withdrawal Agreement as a “very bad deal”.
However, he expressed concern that if there was now a long delay to the UK’s departure from the EU - due to take place on March 29 - Brexit could be thwarted altogether.
“No deal is better than a bad deal but a bad deal is better than remaining in the European Union,” he said during an LBC radio phone-in.
Downing Street has been scrambling for support for the deal - particularly from the Democratic Unionist Party (DUP) - in the hope of bringing it back before Parliament ahead of an EU summit on Thursday.
But it is thought the Prime Minister could delay the crucial vote for another week unless she is confident of avoiding a third humiliating defeat on the package, which MPs rejected by 230 votes in January and 149 last week.
She has warned that if her deal is not approved, the UK will have to seek a lengthy extension to negotiations, potentially losing Brexit altogether.
The Prime Minister’s official spokesman confirmed ministers would want to be confident they had a “realistic prospect” of success before deciding to call a third vote.
Under House of Commons rules, the Government must table a motion by the close of business on Tuesday if a vote is to be held before the Prime Minister goes to the summit in Brussels.
Mr Rees-Mogg said he would wait to see what the DUP decided before finally making up his mind which way to vote.
However, he said that Brexit supporters would need to weigh up whether, if the deal was defeated again, it would actually lead to a no-deal break - as they would prefer - or whether it would see Britain trapped in the EU.
“Mrs May’s deal, however bad it is, means that we are legally outside the European Union,” he said.
“We have got as close to leaving as we will ever get under these circumstances. If it is thwarted now, no-one is ever going to allow us another chance to have a vote.
“The whole weight of British establishment opinion will prevent that ever happening again.”
He added: “As long as people think we can get to no deal, they will vote the deal down. That is my position.”
Earlier, former foreign secretary Boris Johnson called on Mrs May to postpone another vote on her deal, warning it would be “absurd” to bring it back to the Commons without first securing change from Brussels.
He said that as it stood, the Northern Ireland backstop - under which the UK remains in a customs union until both sides agree a trade deal - gave the EU “an indefinite means of blackmail”.
“Unless we have some change - and at present, in the immortal phrase, nothing has changed - it is hard to ask anyone who believes in Brexit to change their mind,” he said.
Mrs May’s hopes of rallying Conservative MPs behind her were dealt a further blow by a letter to The Daily Telegraph from 23 Leave-backing backbenchers arguing for a no-deal exit.
“’No deal’ will prove to be the precursor to a very good deal indeed,” wrote the Tory MPs, including former ministers Owen Paterson, Sir John Redwood and David Jones.
“Our moral course is clear: it is not our fault that we are confronted by two unacceptable choices, but it will be our fault if we cast a positive vote in favour of either for fear of the other.”
However, the Prime Minister received a boost from former chancellor Lord Lamont, who urged fellow Brexiteers to focus on the “prize” of leaving the EU and back her deal.
Writing in the Daily Mail, he said that “history will not understand if it is Conservative MPs who prevent us claiming our self-government”.
Negotiations with the DUP were expected to continue on Monday, although Downing Street said a formal meeting has not been scheduled.
The 10 DUP MPs are viewed by Downing Street as pivotal, not just for the votes they provide but the influence of their stance on Conservative Eurosceptics.
DUP MLA Jim Wells told BBC Radio 4’s Today programme: “We still have a huge difficulty with the backstop, because we see it as a waiting room for constitutional change.
“We could find ourselves locked in there forever in effect, and once you get in you can never get out. We have to have a mechanism where we can escape the backstop.”
Mr Wells said a proposed “gentlemen’s agreement” that any changes to Northern Ireland’s relationship with the EU would be mirrored by the rest of the UK might prove “unenforceable”.
And he denied that the DUP was taking part in a financial “auction” for its support, insisting that “money is not being discussed on the table at the moment”.
Mr Wells estimated that as many as 30 Tory MPs will never vote for Mrs May’s deal, meaning that a third defeat was “inevitable” with or without DUP support.