Taking daily iron supplements during pregnancy can reduced the chances of having a small baby as well as anaemia, says research from Harvard University.
Studies of two million women found that taking even a tiny amount of iron cut the risk of anaemia by 12% and low birth weight by 3%.
Pregnant women in the UK are not given iron supplements unless their iron levels are found to be low.
Serious iron deficiency tends to affect women in poorer countries.
The British Medical Journal study analysed the results of more than 90 randomised trials and studies involving pregnant women in countries including China and Tanzania.
For every additional 10mg of iron taken each day, up to a maximum of 66mg per day, the risks of anaemia and low birth weight decreased, the study said.
Birth weight was found to increase by 15g with each 10mg of iron taken per day.
But researchers found no reduction in the risk of premature birth as a result of iron use.
Previous studies have suggested there could be a higher risk of low birth weight and premature birth in pregnant women with anaemia.
The study says iron deficiency is the most common cause of anaemia during pregnancy, especially in low and middle income countries, affecting about 32 million pregnant women in 2011.
The study authors are calling for improved antenatal care in countries where iron deficiency is common and say future research should look at "feasible strategies of iron delivery".
The World Health Organization currently recommends a dose of 60mg per day for pregnant women.
Dr Batool Haider, study author from the department of epidemiology and nutrition at Harvard University's school of public health, said even high-income countries could take something from the research.
"The recently estimated prevalence of iron deficiency anaemia during pregnancy in Europe was estimated to be 16.2% in 2011," she said.
NICE guidelines, however, say that iron supplements should not be offered routinely to all pregnant women in the UK.
Janet Fyle, professional policy adviser at the Royal College of Midwives, said ensuring pregnant women had the right level of iron was important.
"Women's iron levels are checked at specific times during pregnancy. Appropriate action is taken if required, such as dietary advice or an iron supplement may be recommended.
"There is perhaps a need here in the UK for us to focus on ensuring better pre-conception health, so that women contemplating pregnancy can adjust their diet to include appropriate nutrients before becoming pregnant."
She added: "The problem of serious iron deficiency tends to affect low income countries, where some women may already have poor health status before pregnancy and have the added burden of not being able to afford iron supplements."
Dr Roger Marwood, consultant obstetrician and spokesman for the Royal College of Obstetricians and Gynaecologists, said the effects of iron on pregnant women in low and high income countries in the study were hard to ignore.
"This large study shows all the signs of there being a real effect - and it shows that even low doses can have a significant effect."
He said women who are intolerant to iron can suffer from indigestion, bloating and other stomach problems.
But reducing the dose should also reduce the side effects.
Dr Sue Pavord, consultant haematologist at University Hospitals of Leicester, said the study provided compelling evidence for the benefits of iron supplementation on foetal growth. Up until now, the evidence has been inconclusive.
She said: "It's not clear whether such big effects will be seen in the UK population and whether routine supplementation for all women will be better than our current approach, which is prompt identification and management of at risk groups.
"But in the light of this new data we will be reviewing this."