He said the platform "unfairly" reduced the visibility of 600,000 accounts, including some members of Congress.
But he was unable to immediately say whether a majority of them were Republican, Democratic or otherwise.
Mr Dorsey is being questioned by senators over allegations that Twitter censors conservative voices.
Several Republicans, including US President Donald Trump, have accused Twitter of bias, which the company denies.
"Twitter does not use political ideology to make any decisions, whether related to ranking content on our service or how we enforce our rules," said Mr Dorsey.
However, he said the company had made mistakes.
On Wednesday, the US Department of Justice said it would investigate "growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms".
What is the Twitter hearing about?
Allegations of censorship were fuelled when Twitter added a "quality filter" to the platform and its search results.
Some users noticed that their tweets no longer appeared in search results and suggested that their content was being hidden, known as a "shadow ban".
Mr Dorsey told senators that the platform used "hundreds of signals" to decide "what to show, down-rank and filter".
"We do not shadow-ban anyone based on political ideology," he said.
He explained that the algorithm had acted on the behaviour of people following accounts - so some politicians were punished for the behaviour of their followers.
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