The report, entitled Freedom in the World 2015, covered 195 countries worldwide, of which 89 (46%) were rated "free", 55 (28%) "partly free" and 51 (26%) "not free". Croatia was again rated as a free country.
The report found an overall decline in freedom for the ninth consecutive year.
"Acceptance of democracy as the world's dominant form of government — and of an international system built on democratic ideals — is under greater threat than at any other point in the last 25 years," Freedom House said.
It noted that nearly twice as many countries suffered declines as registered gains — 61 to 33 — and the number of countries with improvements hit its lowest point since the nine-year erosion began.
The report cited "Russia's invasion of Ukraine, a rollback of democratic gains by Egyptian president Abdel Fattah el-Sisi, Turkish president Recep Tayyip Erdogan's intensified campaign against freedom of the press and civil society, and further centralization of authority in China as evidence of a growing disdain for democratic standards that was found in nearly all regions of the world."
Croatia was rated as a free country, the same as last year, with a rating of 1 for political rights and a rating of 2 for civil liberties, where 1 represents the most free and 7 the least free rating.
Slovenia ranked highest among the countries of the former Yugoslavia, with a score of 1 for both ratings. Montenegro and Serbia were rated "free", while Bosnia and Herzegovina, Kosovo and Macedonia were rated "partly free".
Russia was rated "not free" for tightening its grip on the media sector and nongovernmental organisations.
At the bottom of the ranking, with ratings of 7 for both political rights and civil liberties, and described as the worst of the worst, were the Central African Republic, Equatorial Guinea, Eritrea, North Korea, Saudi Arabia, Somalia, Sudan, Syria, Turkmenistan, and Uzbekistan.
The report singled out terrorism for its impact on freedom in 2014. "From West Africa through the Middle East to South Asia, radical jihadist forces plagued local governments and populations. Their impact on countries such as Iraq, Syria, Pakistan, and Nigeria was devastating, as they massacred security forces and civilians alike, took foreigners hostage, and killed or enslaved religious minorities, including Muslims they deemed apostates."
The report also cited cases of torture and mistreatment of terrorism suspects by the US Central Intelligence Agency.