In an interview in Le Monde on Friday Valls said France, which is home to around five million Muslims, needs to forge a new rapport with Islam.
"We need to reset and invent a new relationship with Islam in France," Valls said.
The PM has long wanted to help nurture a more French version of Islam, without extremists elements and said in Friday he was in favour of a ban on foreign funding of mosques.
He also wants Imams to be trained in France rather than abroad.
The PM has warned in the past that Salafists were "winning the ideological and cultural battle" in France, home of Europe's biggest Muslim population.
And he has pledged to "massively" increase France's security and defence budgets in the coming years, as the country grapples with a growing jihadist threat after two deadly attacks last year.
"The Salafists must represent one percent of the Muslims in our country today, but their message -- their messages on social networks -- is the only one we end up hearing," he said.
France has long had an uneasy relationship with Islam, even before recent jihadist killings in Paris, Nice and Rouen.
Successive governments have struggled to integrate North African immigrant communities into French life and many on the right simply see Islam as incompatible with French culture.
France's model of assimilation compared to the multi-cultural models in the UK or the US has also not made it easy.
The 2004 ban on the wearing of religious signs in schools and the 2010 “burqa-ban” on the wearing of the full face veil in public, were seen as France trying to force assimilation on the Muslim community.
While the French public and politicians broadly supported the two laws opponents argued it would only work to stigmatise and alienate the country's Muslim community even further.
It is not clear what the PM is thinking of when it comes to this “new relationship” but in the past he has expressed extending the ban on religious signs to universities.
"The veil does not represent a fashion fad, no, it's not a colour one wears, no: it is enslavement of women," he said, warning of the "ideological message that can spread behind religious symbols".
"We have to make a distinction between wearing the veil as a scarf for older women, and it as a political gesture confronting French society."
However members of his own government including the education minister and university bodies do not believe there is a need to extend the law.
French Sociologist and director of the Religious Observatory in France doubted Valls had any clear idea of what he meant by “new relationship” but that it was a mistake to suggest this was the source of terrorism.
“I doubt he has a clear idea in his head, but he needs to separate the issues,” said Liogier who has criticized Valls in the past for "showing a complete ignorance of all the multiple dynamics that play a role in Muslim communities today.”
“Let's stop talking about Muslim "communitarianism" being the source of terrorism. A man with a beard or a woman wearing the veil are other issues, they are not the problem of terrorism.”