Mr Grayling said: "There's a balance between making sure you have things that provide the right incentives within prisons for prisoners to behave well and things that, if they're looked at from the outside world, look as if they are out of kilter with what people would expect from prisons.
"What we're trying to do is make sure we've got the right balance and what we do is defensible in both directions."
Inmates who smuggle mobile phones into prison to take pictures of themselves seemingly having an easy time before posting them on social networking sites also face tough action.
Giving a key speech on criminal justice in central London, Mr Grayling said: "Those offenders who smuggle mobile phones into prisons and take pictures of themselves and their fellow inmates purporting to be having an easy time should take heed - they will face serious disciplinary consequences.
"This is why Jeremy, as a matter of urgency, is reviewing the prison regime, and we will make changes where we need to."
Mr Wright suggested the current system was not working.
It comes after eight men at Haverigg prison in Cumbria flouted the ban on mobile phones in jails, posing while stripped to the waist and grinning before uploading the holiday snap-type photo to Facebook.
"Taking a mobile phone into prison is already an offence," Mr Wright said.
"We just need to make sure the systems are working properly.
"We'll do everything we can to stop people taking a mobile phone in in the first place."
Mr Wright said he would be "looking very closely at the provision of paid-for TV channels for prisoners, including Sky TV", adding: "I will take some persuading that this is appropriate, but the review is under way and is being treated as a matter of urgency."
The Government was also considering blocking mobile phone signals within jails, saying the technology exists to ensure that the signal is blocked only in the prison itself, not in a neighbours' property or on the road outside - or even in the prison car park, Mr Wright said.
It was not known how much such a scheme would cost, he said.
But he added: "It's worth doing for all the reasons we're aware of."
Serco, which runs Dovegate prison in Uttoxeter and Lowdham Grange prison in Nottingham where long-term inmates can watch premium Sky channels on TVs in their cells, said the service costs the taxpayer nothing.
Vicky Odea, Serco's operations director for secure accommodation, said: "This is completely paid for by the Prison Trust which is funded by prisoners and it does not come out of the public purse.
"The small in-cell televisions are funded by prisoners who pay a weekly fee to rent them through money that they earn in the prison workshops."
She went on: "Access to televisions is conditional on good behaviour. TVs can and will be removed from prisoners whose behaviour becomes unacceptable."