His comments came a day after he was booed off stage at an address for more than 1,000 Zimbabwean exiles in London.
Mr Tsvangirai admitted the widely-criticised land reforms where white farmers were forced from their land had been a "disaster".
He is on a tour of Europe and the US to lobby for relief funds for Zimbabwe.
He joined a unity government with Mr Mugabe in February following disputed elections in the poverty-stricken country.
Mr Tsvangirai, who had in the past been badly beaten by pro-Mugabe forces as leader of the opposition Movement for Democratic Change (MDC), said he understood why there was surprise over his co-operation with the president.
"We all know of a post-conflict situation. We had a similar experience in 1980, Mugabe declared reconciliation with the very same enemies he was fighting. In South Africa Nelson Mandela did the same."
He said the country’s president, who has ruled the landlocked former British colony since 1980, had accepted there need to be changes.
"Mr Mugabe has already moved, he has already accepted that this is a process of transition and after two years we should go for an election.
It [land reform] has been a disaster
Zimbabwean Prime Minister Morgan Tsvangirai
"It will be a fair election because we are transforming the electoral environment. We are transforming the institutions that were used to abuse people."
Mr Tsvangirai said the last 10 years of land reform – which has included the forced ejection of white farmers from their land – had "not been perfect" before admitting it had in fact been "a disaster".
He said: "It has been a disaster. We all accept that, across the political divide." But he said the government would still work towards a more "equitable" system of land ownership.
Mr Tsvangirai, who was booed by Zimbabweans at an address at Southwark Cathedral where he urged exiles to return to the country, said he understood why people were cautious about returning.
"I understand very well, I understand some of them left under circumstances of involuntary exile for themselves because of the circumstances back then."
He said the reforms, which would include new legislation to free press restriction, were "defining a new destiny for the country".
Ahead of a meeting with Prime Minister Gordon Brown, Mr Tsvangirai said he would ask the British government for financial support to help the country through its transitional phase.
"Let’s re-establish normal relations Zimbabwe and the UK, let’s have transitional support, because it’s important to support this transition in order to strengthen the democratic reforms," he said.
He said US President Obama was "interested to see progress, interested to see we don’t slide back".
Mr Tsvangirai’s UK visit is the final stage of a tour of Europe and the US.