The Collaborative International Dictionary of English v.0.48:

dignify \dig"ni*fy\, v. t. [imp. & p. p. Dignified; p. pr. &
   vb. n. Dignifying.] [OF. dignifier, fr. LL. dignificare; L.
   dignus worthy + ficare (in comp.), facere to make. See
   Deign, and Fact.]
   To invest with dignity or honor; to make illustrious; to give
   distinction to; to exalt in rank; to honor.
   [1913 Webster]

         Your worth will dignify our feast.       --B. Jonson.

   Syn: To exalt; elevate; prefer; advance; honor; illustrate;
        adorn; ennoble.
        [1913 Webster]

WordNet (r) 3.0 (2006):

dignify
    v 1: confer dignity or honor upon; "He was dignified with a
         title" [syn: ennoble, dignify]
    2: raise the status of; "I shall not dignify this insensitive
       remark with an answer"

Moby Thesaurus II by Grady Ward, 1.0:

31 Moby Thesaurus words for "dignify":
   adorn, aggrandize, bestow honor upon, better, celebrate,
   confer distinction on, conventionalize, distinguish, elevate,
   enhance, ennoble, erect, exalt, formalize, glorify, grace, honor,
   improve, lift, magnify, observe, raise, ritualize, signalize,
   solemnize, stylize, sublime, upgrade, uplift, upraise, uprear