The flight from Gatwick to Newquay was an estimated 300ft (90m) off the ground when the wild animal was spotted.
Passenger Pete Atkinson said there was a tense five-minute gap between the aircraft climbing sharply away from the runway and the pilot announcing the badger's presence.
The airport said it was a case of being "cautious in the interest of safety".
Mr Atkinson, a freelance cameraman, said: "We were on the final approach when all of a sudden the under-carriage was lifted back up and the engines revved up.
"People went quiet and started to look out of the window as we headed out over the sea."
About five minutes later, the pilot announced the diversion of the aircraft carrying about 60 people was due to a badger being seen on the runway.
Mr Atkinson said passengers then laughed and made jokes about roadkill.
FlyBe flight 806 was due to land at 21:15 GMT on Sunday was delayed by around 15 minutes.
A spokesman for Cornwall Airport Newquay said there was "a suspected badger sighted on the runway by the bird control unit".
The spokesman said the aircraft landed safely following a full check of the runway.

The Gulls signed unattached Racchi, 27, and Yeovil Town's Allen, 22, on short-term deals on 1 February.
Amos Kabeya, Liam Prynn, Oneil Odofin and Exodus Geohaghon are also released.
But Torquay are in talks over new deals for Nathan Blissett, Dan Butler, Angus MacDonald, Courtney Richards, Aman Verma, Toby Ajala, Shaun Harrad, Sam Chaney, Luke Young, and Ben Gerring.

Raheem Wilks, 19, was the brother of Leeds United's Mallik Wilks. He was shot near Too Sharps on Gathorne Terrace, Harehills, on 26 January.
His coffin was taken to St Aidan's Church, Harehills, by horse-drawn hearse.
Two men have been charged with his murder and are due to stand trial in October.
Read more about this and other stories from Leeds and West Yorkshire
The Rev Andi Hofbauer, who led the service, said Raheem "loved life and was a bit of a joker, bit of a clown".
"They [his family] described him as fearless.
"He desperately wanted to be popular and was well-loved amongst his family and friends."
She said the service featured favourite songs chosen by his family and the hymns Amazing Grace and How Great Thou Art.
Following the service, during which his brother Malik delivered the eulogy, Raheem was buried at Killingbeck Cemetery.
A badger on an airport runway forced a passenger plane to abort its landing.
[NEXT_CONCEPT]
Torquay United have announced that midfielders Iffy Allen and Danny Racchi are to leave the National League club.
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Hundreds of people have attended the funeral of a teenager shot and killed outside a barber's shop in Leeds.