The 36-year-old, who by reaching the final had already guaranteed his return to world No. 1, supplanting Rafael Nadal when the new rankings are released on Monday, continued his domination over the Canadian with a 6-4 7-6 (3) victory.
Federer will be looking for his 18th career grass-court title.
Roger Federer will once again return to pinnacle of ATP Rankings on Monday after moving into the final of the Mercedes Cup in Stuttgart.
The only break of serve came in the third game of the match with Federer clinching it with a backhand victor.
Raonic, from Thornhill, Ont., won his last title at the 2016 Brisbane International.
Switzerland's Roger Federer celebrates winning the final against Canada's Milos Raonic at Tennis Club Weissenhof in Stuttgart, Germany.
"It's a great comeback for me", said Federer, who was playing his first tournament after an 11-week break, having sidestepped the entire claycourt season.
The Swiss tennis player was beaten in a tiebreak in the first set, 6-7 (2) but came back fighting to win the second and third sets, 6-2 and 7-6 (5) in just an hour and 51 minutes.
The Swiss star has a 10-3 in career head-to-head meetings against the Canadian.
Pouille fended off the Canadian's effort as much as possible during the match, including saving two break point opportunities from Raonic.
"The most important thing is going to be to focus on my game and if I can do my things well", Raonic said.
"So I'm very happy with myself and I hope I can continue to improve my level again tomorrow".
The 35th-ranked Raonic, a victim of various injuries over recent seasons, was playing a final for the first time in his last 16 tournaments dating to Istanbul past year.
Federer has won two tournaments this season and has 97 singles titles overall.
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