The rules also allow passengers to carry up to two golf clubs, certain toy bats or other sports sticks -- such as ski poles, hockey sticks, lacrosse sticks and pool cues -- aboard in carry-on luggage.
The TSA has said it's aligning its policy with international rules.
But after consulting with Federal Air Marshal Service leaders, the agency opted to continue excluding knives that most closely resemble weapons, specifically knives with blades that lock in place, or have molded hand grips.
Box cutters and razor blades also would remain on the prohibited items list.
Airlines for America, the trade association representing the major U.S. airlines, said Monday that "additional discussion is warranted" before small knives are allowed on planes. Three of the nation's five biggest carriers, Delta, American and US Airways, have spoken out against the policy.
Many critics of the new rules contend that in addition to adding an unnecessary threat to the safety of airline crews and passengers, the changes won't make a difference in the TSA's ability to concentrate on other threats.
Knives are probably the most common items surrendered by passengers at screening points, aside from liquids.
Travelers surrender about 35 knives at Baltimore-Washington International Airport on an average day and about 47 per day at Los Angeles International Airport, officials say.
"Today, we find on average of four guns at checkpoints, but we also find about 2,000 of these small pocket knives every day," Pistole said on Thursday.
"On average that takes two to three minutes for the pocket knife to be identified, for that bag to be pulled, for that bag to be opened, for the knife to be found," he added.
That's valuable time, he said, noting that other more dangerous items could slip by security screeners.
Questioned by reporters, White House spokesman Jay Carney said he did not think President Barack Obama had a response to the issue.
"I'm sure that the TSA has been asked this question and explained their thinking in making decisions like this; DHS as well, I assume," Carney said of the TSA's parent agency, the Homeland Security Department.
"My understanding as a layman, as an observer, not as somebody who has worked the policy process, is that this has to do with an assessment of where the most likely threats are," Carney said.