Ben Wallace said the Russian president has made the mistake of having no allies in his actions, comparing him to Tsar Nicholas I during the Crimean War.
Mr Wallace, a former Scots Guards officer, said his regiment had “kicked the backside” of the tsar in the Crimea and “we can always do it again”.
The unguarded comments came as the Cabinet minister chatted with serving military personnel at the Horse Guards building in Westminster.
He said: “It’s going to be a busy Army.
“Unfortunately we’ve got a busy adversary now in Putin, who has gone full tonto.”
Mr Wallace said the UK has 1,000 personnel on stand-by to respond to the crisis, adding: “The Scots Guards kicked the backside of Tsar Nicholas I in 1853 in Crimea – we can always do it again.”
He continued: “Tsar Nicholas I made the same mistake Putin did… he had no friends, no alliances.”
The Defence Secretary’s comments came in a room dominated by a large painting depicting the Battle of Inkerman, a major engagement during the Crimean War.
Mr Wallace’s assessment of Mr Putin’s mental state came after Boris Johnson accused the Russian leader of being “in an illogical and irrational frame of mind”.
Mr Wallace told reporters he was keeping the possibility of sending further weapons to Ukraine “under constant review”, adding: “We’re in a pretty good position to deliver any type of aid pretty quickly to Ukraine, no matter what that aid is.”
He suggested that Russian forces invading Ukraine could be followed by a mobile crematorium to help disguise the number of casualties inflicted during the potential war.
“Fundamentally, when you have over 60% of your combat forces poised on the borders of another state, the overwhelming scale of the Russian intimidation and forces – including some pretty horrendous weapons systems – are pretty worrying.
“And we also expect to see some of the things they’ve done previously. Previously, they’ve deployed mobile crematoriums to follow troops around the battlefield, which in anyone’s book is chilling.
“If I was a soldier, and knew that my generals had so little faith in me that they followed me around the battlefield in a mobile crematorium, or I was the mother or a father of a son, potentially deployed into a combat zone, and my government thought that the way to cover up loss was a mobile crematorium – I’d be deeply, deeply worried.”