The special event displayed a positive sense of continuity from Benedict to Francis after a number of conservative Catholics had expressed a wish to return to Pope Benedict's tradition-minded papacy.
It took place in the Clementine Hall of the Apostolic Palace and the current pontiff invited the entire Vatican Curia, the bureaucracy, to celebrate Benedict's anniversary.
Catholic prelates all managed to each individually greet the pope.
Benedict, 89, spoke to the crowds about theology and thanked Pope Francis for letting him live in the Vatican gardens, where he said he felt "protected".
The former pontiff spoke without any notes and thanked God for his life.
He said: "Thank-you, Holy Father, for your goodness, which from the first moment of your election has struck every day of my life.
"We hope that you can go forward with all of us on this path of divine mercy, showing us the path of Jesus toward God."
Benedict endorsing the pope may help restore confidence amongst conservative Catholics, some of whom have criticised the pope's interpretations of theology and emphasis on mercy over morals.
The pope also reacted to questions that surrounded Benedict's resignation, and said Benedict had pledged his obedience to him on the day he stepped down, saying that Benedict "had my back" and was continuing to help the church through his prayers.
Pope Francis also thanked Benedict for his 65 years of service to the church.