The "remarkable" species was a member of the family Metriorhynchidae that evolved a "dolphin-like" body, say scientists.
They had smooth scaleless skin, flippers, and a tailfin and fed on prey including fish and squids, according to the findings published in the Journal of Systematic Palaeontology .
The new species, called Enalioetes schroederi, was discovered by an international team of scientists, including researchers from the UK and Germany.
They said some metriorhynchid species had large, serrated teeth - suggesting they fed on other marine reptiles.
Project leader Dr. Sven Sachs says metriorhynchids are best known from the Jurassic Period, with their fossils becoming rarer in the Cretaceous.
He explained that enalioetes schroederi is known for a three-dimensional skull, making it the best-preserved metriorhynchid known from the Cretaceous.
Dr. Sachs, of the Natural History Museum, Bielefeld, Germany , said: “The specimen is remarkable as it is one of very few metriorhynchids that is known by a three-dimensionally preserved skull.
"This allowed us to CT scan the specimen and so we were able to learn a lot about the internal anatomy of these marine crocodiles.
"The remarkable preservation allowed us to reconstruct the internal cavities and even the inner ears of the animal.”
Dr. Mark Young, of the University of Edinburgh , said: “Enalioetes gives us fresh insight into how metriorhynchids were evolving during the Cretaceous Period.
"During the Jurassic metriorhynchids evolved a body plan radically different from other crocodiles - flippers, tailfin, loss of bony armor and smooth scaleless skin.
"These changes were adaptations to an increasingly marine lifestyle.
"Enalioetes shows us that this trend continued into the Cretaceous, as Enalioetes even larger eyes than other metriorhynchids - which were already big by crocodylian standards - and the bony inner ears were even more compact than other metriorhynchids, a sign that Enalioetes was probably a faster swimmer.”
The perfectly preserved skull along with the first neck vertebrae were discovered more than 100 years ago in a quarry in Sachsenhagen, near Hannover.
It was given for preparation and study to Henry Schroeder of the Prussian Geological Survey in Berlin where it was thought to have been incorporated in the collection.
It was assumed that the specimen was lost during World War II, but it was rediscovered in the Minden Museum in Western Germany.
It turned out that the specimen had been returned to the finder whose family took it to Minden where they found a new home after the war, taking the specimen with them.
The crocodile is now one of the most valuable specimens in the Minden collection.
The species is named after Henry Schroeder, of the Berlin Geological Survey, who provided the initial description.
By comparing the fossil with those from other museum collections, Dr. Sachs and his team determined it was a species new to science.
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