"He was uncompromising and correct in his belief that the media should be free of regulation," he told the crowd after accepting Sir Keith's induction into the Victorian Media Hall of Fame.
"It is in the public interest that news media not be fettered, not be controlled, by any elite, be it social, political, or economic.
"As Sir Keith wrote, 'it must always be our readers' interests, our listeners' interests, our viewers' interests that are paramount'."
Mr Murdoch said he had also read the speech to Dame Elisabeth on Wednesday, the day she died.
"I think she appreciated it," he said.
The remarks came as Australia's media debates recommendations for industry reform from the Finkelstein independent media inquiry, and as media in the UK continues to push back against ethics reforms urged during the Leveson inquiry.
Sir Keith, who died in 1952, was inducted on Thursday evening as one of 20 in the inaugural batch of recipients in Victoria's Media Hall of Fame, designed to pay tribute to the first 100 years of journalism in the state.
The award was presented a day after Dame Elisabeth passed away in her Melbourne home, bringing a sombre tone to an event in Melbourne's CBD.
Lachlan Murdoch was emotional at times during his speech, saying it was a difficult time for his family.
Earlier in Sydney, he spoke of how he thought Dame Elisabeth, who died at the age of 103, was close to being a saint.
"She lived a beautiful life and a very meaningful life and she passed away peacefully, which is all we can ask for," he told reporters after Ten's annual general meeting earlier in the day.
Dame Elisabeth will be remembered at a state memorial on December 18.