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"Today, we have just warned. If they [the media] does not pay heed to the warning then we'll see what we can do," the minister was quoted as saying by the Daily Times newspaper.
A statement issued after the ministers' meeting said the Anti-Terrorism Amendment Ordinance of 2001 will be used if the media did not stop glorifying terrorists.
It said the meeting took serious note of attempts by certain private TV channels "to praise terrorists and criminals by showing their interviews."
Rashid said the warning to the media is not aimed at curbing its freedom.
Pro-Al Qaeda tribal leader Ahmad Mehsod, who has owned responsibility for abducting two Chinese engineers, has been making appearances before the media in the tribal Waziristan agency and telephoning newspersons in Peshwar by satellite phones to outline his demands.
Mehsod was released from US detention centre in Guantanamo Bay a few months ago.
Asked why the government in the past "garlanded" terrorists, Rashid said, "It was a wrong decision."