Asked about the criticism that it was inappropriate to take a "selfie" during Nelson Mandela's memorial service, Ms Thorning-Schmidt replied, "Basically it was a festive event which celebrated a man who has lived 95 years and achieved so much in his life".
She said there were lots of photographs being taken of President Obama that day, adding, "I thought it was kind of funny".
She is the daughter-in-law to the former Labour leader Lord Kinnock.
The Prime Minister joked about the infamous "selfie" he featured in alongside US President Obama and Danish Prime Minister Helle Thorning-Schmidt today.
During Prime Minister's Questions, MP Martin Horwood referred to the photo - which has been widely covered in the international press - in a question about roaming charges.
The Prime Minister said it was "only polite" to oblige a request from a "member of the Kinnock family" - referring to the fact that the Danish leader is daughter-in-law to the former Labour politician Neil Kinnock.
Cameron was pictured with US President Obama and Danish Prime Minister Hell Thorning-Schmidt.
The picture immediately went viral, as many social media users felt the smily picture was inappropriate. The Prime Minister's spokesperson said:
I think what the PM would say about yesterday is it was very much a celebration of Nelson Mandela and his life and his achievements.
I am sure many of us were watching the pictures from it and I think it did come across, and rightly so, as a marking and a celebration of Mr Mandela's life. You had plenty of words from the Prime Minister and leaders from around the world that attest to that.