Mr Perrottet dismissed claims from Liberal MP Jason Falinski that the people of NSW had discounted the Independent Commission Against Corruption, which is currently investigating former premier Gladys Berejiklian.
"(The) ICAC in NSW plays a very important role in preventing corruption and uncovering corruption," he told the National Press Club on Wednesday.
"Ultimately, what we should be doing is instilling confidence, not taking it away."
Mr Perrottet said ICAC had a strong and important role to play in the state's future.
It comes as federal Liberal frontbenchers throw their weight behind a possible return to politics for Ms Berejiklian, who resigned after it emerged she was under investigation by ICAC.
The former coalition premier is being investigated over whether she failed to disclose a relationship with disgraced Liberal MP Daryl Maguire when awarding grants to his Wagga Wagga electorate.
She has also been accused of turning a blind eye to Mr Maguire's corrupt conduct.
A possible run from Ms Berejiklian for the federal seat of Warringah has dominated the media cycle for the past two days.
But Prime Minister Scott Morrison now suspects she may not put her hand up.
Mr Morrison said Ms Berejiklian would make a strong contribution to his federal team if she decided to run despite the ICAC probe - an investigation he has dismissed as a kangaroo court.
"That's a decision for Gladys, ultimately, and she may choose not to go ahead here, I suspect," he told reporters in Sydney on Wednesday.
"That's a matter for her and I respect her choice."
Mr Morrison acknowledged Ms Berejiklian had gone through a difficult time due to the anti-corruption inquiry, which grilled her on details of her private life.
"I know it's been a very difficult time for her in recent times," he said.
"She has suffered terribly in terms of things that have been aired publicly and I think that was just awful to watch."
Labor MPs have criticised the prime minister for dismissing the NSW investigation and for casting doubt over the ICAC's independence.
Warringah MP Zali Steggall said integrity was a major issue in her electorate and chastised government ministers for being out of touch with the public by continuing to undermine the ICAC.
The independent also said she remained confident of her position in the Sydney seat, as any Liberal candidate would be a puppet of Barnaby Joyce on climate policy, which is a key issue in Warringah.
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