Monday's ceremony at the scene of the raid was attended by some of the rescued hostages and Israeli special forces who carried out the operation.
Mr Netanyahu said: "Exactly 40 years ago Israeli soldiers carried out the historic mission in Entebbe. Forty years ago they landed in the dead of night in a country led by a brutal dictator who gave refuge to terrorists. Today we landed in broad daylight to be welcomed by a president who fights terrorism."
His elder brother, Jonathan, was shot dead as he led the operation to free hostages, who had been taken captive on an Air France flight by Palestinian and German militants.
Four hostages, at least seven hostage-takers and 20 Ugandan troops who were guarding the old terminal were also killed.
Almost all those freed were Israeli and non-Israeli Jews who had been separated from other passengers by the gunmen. The Air France captain and his 12-strong crew were also rescued.
The non-Jewish passengers had been released by the hostage-takers earlier in the week.
Mr Netanyahu had previously called the operation "dramatic national experience" and one that had "great personal consequence" for his family.
In Entebbe, the prime minister said: "I learned from my brother that you need two things to defeat the terrorists: clarity and courage."
"When terrorism succeeds in one place it spreads to other places, and when terrorism is defeated anywhere it is weakened everywhere. This is why Entebbe... was a victory for all humanity."
Analysis: 'Return to Africa', by Jonathan Marcus, BBC diplomatic correspondent
The death of his brother who commanded Israel's hostage rescue mission at Entebbe changed the course of Benjamin Netanyahu's life and set him on a trajectory that was ultimately to make him prime minister.
But this is much more than a personal pilgrimage or the commemoration of a bold military operation. Mr Netanyahu's swing through Uganda, Kenya, Rwanda and Ethiopia is intended to mark Israel's "return to Africa", a region that is figuring more and more prominently on the international stage.
Israel's ties with sub-Saharan Africa were strong during the early 1960s but withered under pressure from the oil power of the Arab states.
Israel's security links with apartheid South Africa also didn't help.
But now there are mutual benefits for both sides with African states eager to develop economic and security ties and Israel keen to make new friends and develop ties in a region where Islamist extremism is on the march.
The Israeli leader earlier said the trip was part of an effort to "return to Africa in a big way".
Israel has launched a $13m (£9.8m) aid package to strengthen ties with African countries, including providing training in security and health.
It hopes greater engagement will see it gain more support from African countries at the UN and other international bodies, where it is regularly condemned over its occupation of the West Bank and blockade of the Gaza Strip.
However, Palestinian government spokesman Jamal Dajani said he believed Israel's attempt to gain influence would fail.
African states would see through Netanyahu's "propaganda" because Africans and the Palestinians shared a history of "occupations and colonialism", he told AP news agency.