Federer rallied from 3-1 down to win 7-6, taking the tiebreak 10-7. His victory came days after a sore back contributed to his struggles at the Masters Cup, where he failed to reach the semifinals.
John McEnroe and Bjorn Borg also played at the "Showdown of Champions," which included four one-set matches.
Federer, now ranked No. 2, lost his No. 1 ranking to Rafael Nadal before winning his 13th Grand Slam title at the U.S. Open. He was forced to withdraw from the Paris Masters because of his back and said he needs a break from tennis.
"It has been a tough season with lots of traveling and I could just sleep for a month," he said. "I felt fine during the game, but obviously after a hard season I would need some time off. I'm glad we are at the end of the season and I will take it easy for a few weeks."
The 10th-ranked Blake beat Federer the last time they played, at the Beijing Olympics.
After dominating tennis the last few years, Federer began the year recovering from mononucleosis. He still managed to reach three major finals and the semifinals at the fourth.
His U.S. Open win pulled him within one title of Pete Sampras' Grand Slam record, but Federer was undecided on whether he would prefer to win his first French Open crown in 2009 or his sixth Wimbledon.
"That's a pretty hard question to answer," Federer said. "I'll probably have the answer in August."
In another singles match, McEnroe beat Borg 7-6 (13-11).
"I'm delighted to have won this match as it was really tough," said McEnroe, who is famous for angrily disputing line calls. "I hate to say this but the linesmen did a good job."
Federer and Borg then teamed to play McEnroe and Blake in doubles, and the Americans won 7-5.