Yusuf Islam, who had a string of pop hits in the 1960s and '70s, said an Al Qaeda video claiming responsibility for the attacks and linking them to Britain's role in the Middle East showed foreign policy "was not the only factor but it was a major contributory."
"At the same time we have to look at how the teaching of Islam has been distorted," he added.
Speaking at the opening of Cardiff University's Centre for the Study of Islam in the U.K., Islam said schools should teach young Muslims the true meaning of Islam to keep them away from extremist ideas.
"Right now there is a more vital role for education to play in painting a truer picture of Islam," he said. "If you don't give it to the children in schools, anybody can give it to them on the streets or outside the normal environment for learning."
He also said Muslims should do more to integrate into British society.
"Coming to Islam from a Western background, I was slightly surprised early on by the insular approach," he said. "I can understand it because many feel insecure and perhaps they weren't appreciated or were misunderstood.
"With a new generation of English-speaking Muslims we have an opportunity to build many more bridges between the great faiths."
Islam, whose songs include the 1971 hit "Peace Train," was denied entry into the United States last September because American officials identified him as a security risk. He says the U.S. government has still not told him the basis for the allegation.
Last November, he was awarded the "Man for Peace" prize in Rome by former Soviet leader Mikhail Gorbachev, who praised him for charity work and standing by his convictions despite personal hardships.