The judge at the Conseil d'Etat ruled that the “imminent danger justifying the state of emergency has not disappeared, given the ongoing terrorist threat and the risk of attacks”, according to a statement issued by the court.
The decision echoed arguments put forward in court by the interior ministry to keep the state of emergency in place, after the French Human Rights League (LDH) on Tuesday asked the court to suspend all or at least some of the measures.
President Francois Hollande is set to seek parliamentary approval to extend the current three-month state of emergency, which expires on February 26th.
The Senate is to vote on the proposal on February 9th, followed by a vote in the National Assembly on February 16th.
Concern has been growing in recent weeks about the state of emergency, which was introduced after coordinated gun and bomb attacks left 130 dead in Paris on November 13th.
The measures boost police powers, allowing house arrests, raids both day and night and the banning of public gatherings, without permission from a judge.
The Council of Europe's human rights commissioner Nils Muiznieks warned this month that the measures could constitute a “threat” to democracy. Notably, he raised concerns about the ethnic profiling of suspects facing police searches.
And a panel of UN human rights experts said the measures placed what they saw as “excessive and disproportionate” restrictions on key rights.
LDH lawyer Patrice Spinosi called Thursday's ruling a setback “for French democracy”.
“This decision supports the theory that the government wants to maintain the state of emergency so long as there is a terrorist threat, which could result in a permanent state of emergency,” he told AFP.
He also condemned government plans to amend the constitution to make it easier for emergency powers to be imposed in the wake of the jihadist attacks.
One reform would see convicted terrorists stripped of their French citizenship if they have dual nationality, a proposal so controversial it prompted justice minister Christiane Taubira to quit in protest Wednesday, when the reforms were presented to parliament.
The lives of the majority of French people have not been affected by the state of emergency, and a recent poll showed 70 percent of people wanted it kept in place.