She said central bank policymakers understand that moving from a period of very low interest rates to more normal rates will lead to more volatility in financial markets.
But she said the normalization of rates will be an important sign that economic conditions are "finally emerging from the shadow of the Great Recession."
Yellen's comments came in a speech at a conference sponsored by the Bank of France. The Fed last week ended its bond-buying program but its first increase in rates is not expected until mid-2015.
"As employment, economic activity and inflation rates return to normal, monetary policy will eventually need to normalize too, although the speed and timing of this normalization will likely differ across countries based on differences in the pace of recovery in domestic conditions," Yellen said.
"For our part, the Federal Reserve will strive to clearly and transparently communicate its monetary policy strategy in order to minimize the likelihood of surprises that could disrupt financial markets, both at home and around the world," Yellen said.
Yellen spoke after the Labor Department in Washington reported that the U.S. unemployment rate dropped in October to 5.8 per cent, the lowest point since July 2008, while the economy added a solid 214,000 jobs.
During a question-and-answer session following her remarks, Yellen was not asked about Friday's unemployment and she made no comments during her appearance about the current state of the U.S. economy or the possible timing of Fed interest rate moves.
Yellen said that among the lessons learned from the crisis is that central banks need to be prepared to employ all available tools, including unconventional policies such as bond buying, to support economic growth and achieve optimal inflation rates.
In response to a question, Yellen said that before the 2008 financial crisis hit, the Fed had spent a great deal of time studying the prolonged period of weak economic growth and deflation in Japan in an effort to learn how to deal with similar problems.
She said among the lessons U.S. policy-makers drew from the Japanese experience was the need to quickly get banks on a sound footing and to guard against inflation persistently falling below the Fed's 2 per cent target.
"That was an important lesson from the Japanese experience that we have tried to learn from," Yellen said.
Last week, the Fed announced the end of its bond-buying program, which had been designed to keep long-term interest rates low, and upgraded its outlook for the U.S. labour market. The massive bond purchases have pushed the Fed's balance sheet up by more than $3 trillion to nearly $4.5 trillion.
In a statement after a two-day meeting, the Fed reiterated its plan to maintain its benchmark short-term interest rate near zero "for a considerable time." The Fed statement noted that the job market is strengthening. The statement dropped a previous reference to "significant underutilization" of available workers.
Crutsinger reported from Washington.Suggest a correction