Russia is in the process of reforming its armed forces by shifting the focus away from a largely inefficient body of conscripted soldiers toward a smaller professional army.
The current length of military service for draftees is one year, while the shortest term of a military service contract is three years.
"I believe that in the next 10-15 years, our recruiting system should combine both conscription and contracting," Medvedev said at a meeting with paratroopers at a military base near Moscow.
"We should do everything possible to make contract service attractive and prestigious."
He said the monthly salary for an entry-level military specialist may be doubled to around 30,000 rubles ($1,000).
In line with the reform, the armed forces will be downsized to 1 million personnel by 2016. Deputy Chief of the General Staff Vasily Smirnov said on Saturday the reformed forces would be made up of 220,000 officers, 425,000 contract servicemen and 300,000 conscript soldiers.
Medvedev also stressed the importance of pre-conscription training for young draftees at "patriotic clubs."
"It is a useful undertaking...because young people should be in good physical shape and realize what they are expected to do while serving in the military," the president said.