The law requires teachers to stress positive aspects of French colonialism, especially in north Africa.
But during a New Year address, Mr Chirac said the law was "dividing the French" and should be rewritten.
The president also urged compatriots to believe in themselves and to stop indulging in "self-flagellation".
He said France was a great nation and had every reason to be proud of itself.
History must not be written by law
President Jacques Chirac
The colonial history law was passed by the conservative-led parliament in February last year.
Overseas minister Francois Baroin told France Inter radio the law was a sore point for French people whose families came from the former colonies.
Around 44,000 people signed a petition calling for the law to be scrapped.
Interior Minister Nicolas Sarkozy was forced to cancel a planned trip to France's Caribbean islands of Martinique and Guadeloupe by the risk of angry protests, according to AFP.
Mr Chirac, who ordered the law to be reviewed last month, said the National Assembly speaker would table a bill for the law to be rewritten "and come up with a wording which will bring people together and put their minds at rest".
"I want this approach to be part of a more general thinking process because history must not be written by law," he said.
Mr Chirac, who plans to run for re-election in 2007, also announced the establishment of a slavery remembrance day in France - on a date to be announced later this year.
"The question of slavery is a wound for a large number of our fellow citizens, in particular overseas," he said.
"France has set an example by being the first country in the world - and still the only one today - to recognise slavery as a crime against humanity. I have decided to establish a day of remembrance in France."
The end of 2005 was not a harmonious one for Mr Chirac's France - especially in the largely immigrant suburbs.
The worst unrest in the country in nearly 40 years began when two boys of North and West African origin were electrocuted in a Paris suburb after running from police, believing they were being chased.
Residents of the country's poor suburbs, where most of the unrest took place, complained of racism and heavy-handed policing.
Wednesday also marked the lifting of the state of emergency imposed to deal with the riots.
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