Although the use of blind deconvolution of image restoration is a widely known concept, little literatures have discussed in detail its application in the problem of restoration of underwater range-gated laser images. With the knowledge of the point spread function (PSF) and modulation transfer function (MTF) of water, underwater images can be better restored or enhanced. We first review image degradation process and Wells’ small angle approximation theory, and then provide an image enhancement method for our underwater laser imaging system by blind deconvolution method based on small angle approximation. We also introduce a modified normalized mean square error (NMSE) method to validate the convergence of the blind deconvolution algorithm which is applied in our approach. The results of different initial guess of blind deconvolution are compared and discussed. Moreover, restoration results are obtained and discussed by intentionally changing the MTF parameters and using non-model-based PSF as the initial guess.