Speaking at the Online Information conference at London's Olympia, he dismissed the long-running controversy over the site's authority.
He said he now thinks that students should be able to cite the online encyclopaedia in their work.
Previously, Mr Wales believed that the website, which is edited by users, lacked the authority for academic work.
As long as an article included accurate citations, he said he had "no problem" with it being used as a reference for students, although academics would "probably be better off doing their own research".
"You can ban kids from listening to rock 'n' roll music, but they're going to anyway," he added. "It's the same with information, and it's a bad educator that bans their students from reading Wikipedia."
In 2005, at the height of the controversy over the site's accuracy, Mr Wales told the BBC that students who copied information from Wikipedia "deserved to get an F grade", and that the site should really be used as a "stepping stone" to more authoritative information.
New editing and checking procedures have made Wikipedia more trustworthy, said the Wikipedia founder.
Changing procedures
Since the controversy, in which it emerged that the "free editing" policy had allowed articles containing inaccuracies and bias to appear, the site has introduced a system of real-time peer review, in which volunteers check new and updated articles for accuracy and impartiality.
Despite advances in technology, there are no plans to automate this process. "There is no substitute for peer critique," Mr Wales told delegates. 
It is this perceived lack of authority that has drawn criticism from other information sources. Ian Allgar of Encyclopaedia Britannica maintains that, with 239 years of history and rigorous fact-checking procedures, Britannica should remain a leader in authoritative, politically-neutral information.
Mr Allgar pointed out the trustworthy nature of paid-for, thoroughly-reviewed content, and noted that Wikipedia is still prone to vandalism.
But Britannica and Wikipedia should not be seen as direct competitors. Wikipedia, he said, had made the use of encyclopaedias "trendy and popular" with young people, which could only benefit Britannica's subscription-led service.
Content licensing
Jimmy Wales also announced that the site would be rolling out a new version of its free documentation licence.
Although Wikipedia allows users to copy, modify and redistribute information, commercially or non-commercially, the new licensing regime, based on the existing Creative Commons scheme, would "bring Wikipedia into line with the rest of the free content culture". 
We are the Red Cross for information. We won't sell out to Google 
Mr Wales reiterated his commitment to keeping the Wikimedia Foundation free of corporate sponsorship, and of major donors who might want control of online information.
"We are the Red Cross for information. We won't sell out to Google," he said.
The foundation is, however, expanding into the search function, with July's announcement of the Wikia search facility which combines open-source searching and social networking.
"This is a political statement against proprietary-driven software tools," Mr Wales said. "Wiki wants to give people the maximum freedom to do good."
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