In an interview with Fortune magazine, the 83-year-old founder, chairman and CEO of News Corporation also confirmed the existence of a note in which she allegedly praised Blair's physique and "piercing blue eyes".
It was published by Vanity Fair magazine last month.
Murdoch said he was "shocked" by the diary, which he said was only shown to him after he filed for divorce from Chinese-born Deng, his third wife.
Murdoch said his marriage dissolved after the magazine reported rumours that Deng and Blair had allegedly conducted an affair at the press baron's Carmel, California ranch.
"Well, you know, everybody was talking about these things and never telling me anything," he said.
"I don't really want to go into this. But then I was told two pretty circumstantial things about the ranch.
"I was in Australia. When I got back, I naturally asked the staff, and it opened up. That's the story. And then, you know, a week later I filed [for divorce]. As soon as I could find a lawyer."
The Yale-educated Deng, 45, met Murdoch while interning at his subsidiary Star TV in Hong Kong. Blair is godfather of one of their two young daughters.
