Under rule changes, it will take a 75 per cent vote of the caucus to force a leadership spill when Labor is in government.
However, after a lengthy debate at Sydney's Balmain Town Hall today, the threshold for calling a leadership spill in opposition has been set at the lower level of 60 per cent.
The Prime Minister also won caucus endorsement for reforms that will mean Labor's leader is elected by both MPs and rank-and-file members - each with 50 per cent of the vote.
Mr Rudd, who was recently restored as Prime Minister after being removed by factional powerbrokers in 2010, said the reforms would give ALP members a real say in the leadership of the party.
“The Prime Minister who the people elect in the future will the Prime Minister the people get in the future,” he said.
“Decisions can no longer simply be made by a factional few.”
“Each of our members gets to have a say, a real say, in the future leadership of our party,” he said.Mr Rudd said the changes meant the decision on electing a leader would also no longer be subject to factional influences.
Under the changes, an election for the leader will automatically occur after a federal poll in which the ALP goes to opposition.
The 60 per cent rule was one of three amendments to party rules accepted by the caucus, and seconded by Deputy Prime Minister Anthony Albanese.
The second amendment related to the close of nominations for the election of the parliamentary leader.
The third will allow the deputy leader or the highest-ranked House of Representatives MP to act as interim leader while a ballot is held.
“For the future, this is an important set of reforms for the party,” Mr Rudd said.
“We are a party of the grassroots.
“We are at our best when we are listening to people right across the country and we are at our best when the rank and file of our membership, all 44,000 of them, know they have an active say in the future direction of our party.”
On the timing of the election, Mr Rudd said the government had more policy challenges to deal with first.
“In this period of government we've been focused on the outstanding policy challenges that we face and there are still a number to address,” he told reporters.
“These are big challenges for government, we still have other challenges to deal with.”
Today was the last day Mr Rudd could have visited the Governor-General if he wanted an early August 24 election.