Blair, who just returned from the Korean peninsula, said he doesn't see a major war starting, but he believes recent aggression by the North will press South Korea into some lower level military confrontations.
He said there's support among South Koreans for their military to take a stronger stance, adding that "a South Korean government who does not react would not be able to survive there."
He told CNN's "State of the Union" that the North's recent moves to sink a South Korean ship and fire artillery rounds on a South Korean island near a disputed sea border have frayed Seoul's patience. The artillery attack killed four South Koreans, while 46 sailors died in the sinking of the ship.
Blair said that what is needed is a united Korea under Seoul's influence, but China would have to exert its influence on the North for that to happen, and Beijing prefers the two countries to remain divided.