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When "Persia" became "Iran"; Nazi Germans suggested the name IRAN to the Persian ambassador to Germany. The name Iran is a cognate of the Aryan meaning "Land of the Aryans."
(This information is taken in part from "Persia or Iran" by Professor Ehsan Yarshater, published in Iranian Studies, Vol. XXII, No.1, 1989.)
In 1935 the Iranian government requested those countries which it had diplomatic relations with, to call Persia "Iran," which is the name of the country in Persian.
The suggestion for the change is said to have come from the Persian (Iranian) ambassador to Germany in the 1930's, who came under the influence of the Nazis. At the time Nazi Germany was in the grip of racial fever and cultivated good relations with nations of "Aryan" blood. Some Nazi party friends of the ambassador persuaded him that, as with the advent of Reza Shah, Persia had turned a new leaf in its history and had freed itself from the pernicious influences of Britain and Russia, whose interventions in Persian affairs had practically crippled the country under the Qajars, it was only fitting that the country be called by its own name, "Iran." This would not only signal a new beginning and bring home to the world the new era in Iranian history, but would also signify the Aryan race of its population, as "Iran" is a cognate of "Aryan" and derived from it.
The Iranian Ministry of Foreign Affairs sent out a circular to all foreign embassies in Tehran, requesting that the country thenceforth be called "Iran." Diplomatic courtesy obliged, and by and by the name "Iran" began to appear in official correspondence and news items.
This is the important part from what you have quoted.
[...]persuaded him that, as with the advent of Reza Shah, Persia had turned a new leaf in its history and had freed itself from the pernicious influences of Britain and Russia, whose interventions in Persian affairs had practically crippled the country under the Qajars, it was only fitting that the country be called by its own name, "Iran."
from wiki
Rezā Shāh, was the Shah of the Imperial State of Iran from December 15, 1925 until he was forced to abdicate by the Anglo-Soviet invasion of Iran in September 16, 1941.