Dame Caroline Spelman, the Church of England's representative in the Commons, said she wants to "scotch the myth" religious schools fuel segregation.
They can in fact play a crucial role in battling intolerance and division by fostering a greater understanding of religion, she said.
Speaking in a Commons debate on the proposed expansion of grammar and faith schools, she said: "In September this year the Archbishop of Canterbury said something important about the times we live in.
"Religiously motivated violence and extremism are presenting a challenge not seen for over 200 years.
"In such circumstances religious literacy is key - understanding the motivation and ideas of those who commit violence is essential even if we rightly condemn it.
"So I'd like to emphasise that the Church of England is firmly committed to delivering outstanding education and promotes academic excellence."
Dame Caroline dismissed criticisms that faith schools can foster division within societies.
She said: "I do want to scotch the myth that church schools are forces of segregation, it couldn't be further from the truth.
"In fact most of church schools do not practise selection at all, where faith-based criteria apply it is only when schools are oversubscribed and where alternative education provision exists."
The MP told how some church schools in Bradford are 95% Muslim because of the make-up of the area.
Theresa May has announced proposals to lift the ban on new grammar schools and to allow faith schools to select 100% of their pupils on the grounds of their faith - up from the current 50%.
