The ratings agency's comments come after South Korea's ruling party pushed the long-delayed deal through parliament last week amid fierce opposition, with one MP setting off a tear gas canister.
Tom Byrne, senior vice president of Moody's Investors Service, said: "The FTA provides substantial, wide-ranging benefits that are credit-positive for Korea."
The ratification bill is due to be signed Tuesday by President Lee Myung-Bak. Opponents have staged near-nightly protests since it was approved, with 38 police officers injured in clashes Saturday.
Objectors say the pact unduly favours the United States following a revision in December and will hit Korean farmers and small businesses. More rallies are planned including a major protest in Seoul on Saturday, Yonhap news agency reported.
Byrne said in a commentary the deal would boost South Korea's exports and economic growth and increase investment by removing technical barriers to trade, especially in services.
"Combined with a reduction of tariffs on imports and market-opening and liberalisation measures, it will spur a higher level of efficiency and competition in the Korean economy," he wrote.
The deal would also serve to strengthen the US-South Korean security partnership against North Korea, he wrote.
Almost 95 percent of trade in consumer and industrial products will become duty-free within five years. Many tariffs will be abolished immediately, and all trade covered by the deal will be tariff-free within a decade.
Two-way trade was worth $88 billion last year, and Moody's cited an estimate by the US International Trade Commission that Korean exports to the US would increase by $6.4-$6.9 billion annually.
The Korea Development Institute predicts that the FTA will raise the South's GDP growth rate by between 0.1-0.3 percentage points next year.
Moody's rating on South Korea's sovereign debt is A1.