He's actually Sir Tony Blair now. With the Order of the Garter no less, which is at the sole discretion of the monarch.
Is it not customary to raise former PMs to peerage? I seem to recall Denis Thatcher was even given an herediatery peerage
The hereditary peerage for Thatcher was a bit of an oddity, but the convention did used to be that former PMs got a seat in the Lords. That broke down because Major doesn't want one* and it would have been viewed as a slight to him to appoint his successors. As of today, obviously we no longer care about that.
*Brown also doesn't want one, unless it's as part of the procedure of abolishing the HoL as we know it. Blair isn't that bothered and there have been questions in the past about the financial disclosures required and how those might interfere with his business interests.