Kim's statement and the report of the drill came a day after North Korea fired what appeared to be two short-range missiles into the sea in the latest of a series of launches interspersed with spurned peace overtures to South Korea.
It came a week after the president of China, the North's only ally, visited the South in a trip seen as a pointed snub to Pyongyang, and as exposing a slow but steady shift in Cold War alliances in East Asia.
Kim "provided field guidance" during the drill, KCNA reported, without confirming when it took place.
"We should be prepared for both words and actions," he was quoted as saying.
"However fair-minded and just we are, we may become a bargaining chip for the strong and our precious history inherited with blood will loose (sic) its shine in a moment if we are weak."
The KCNA report did not specify to whom Kim was referring.
Japan swiftly condemned Wednesday's launches, the fourth missile test by the North in less than two weeks.
The previous launches had preceded a state trip to South Korea by Chinese President Xi Jinping and had been read by some analysts as a show of pique at his decision to visit Seoul before Pyongyang.
China is North Korea's sole major ally, but while Xi has met four times with South Korean President Park Geun-Hye - including two summits - he has yet to sit down with Kim.
Statements from Pyongyang have suggested several reasons for the tests, including anger over recent South Korean naval drills near the maritime border.
In between the launches, the North has extended a number of apparent olive branches to the South, including a proposal for both sides to halt all provocative military activity.
Seoul dismissed the offers as "nonsensical" in the light of Pyongyang's nuclear weapons programme.
It was not immediately clear what sort of rockets were fired in the drill KCNA reported Thursday.
The news agency said Kim expressed conviction that his troops "would as ever further step up the combat readiness of rockets and always keep themselves ready to promptly fire them by undergoing drills under the simulated conditions of an actual battle and thus cope with the reckless confrontation hysteria of the enemies to stifle the DPRK by force at any cost with powerful military deterrent".
Kim also learned about the firing plan and designated orbit of rockets, before giving the order to fire during a drill which "once again fully demonstrated the tactical rockets' high capability of hitting the targets and combat capability", according to KCNA.