The agency increased the country's level from "selective default" to "B-minus" while praising the "strong determination" of fellow eurozone countries to help it stay as a member state.
S&P also commended the continuing efforts of Greece's government to cut its spending.
The rating is the highest the country has been given since the start of its serious financial crisis in June 2011.
A statement from S&P said: "The upgrade reflects our view of the strong determination of European Economic and Monetary Union [eurozone] member states to preserve Greek membership in the eurozone.
"The outlook on the long-term rating is stable, balancing our view of the Government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so."
Greece is in the process of receiving the second of two bailouts from the European Union and International Monetary Fund.
A total of €240 billion (£195bn) has been earmarked for the state, which has so far received €149bn.
Greece had to seek the bailouts to meet its debt repayments after years of overspending meant it could not keep up with its debt obligations.
Since then, the country's position has worsened due to the negative opinion of the markets.