Thaksin's original eight-year prison term was commuted to one year by Thailand's king - just days after he returned from exile.

The handling of the case has led to criticism from many Thais, who say the rich and powerful are often given privileged treatment.

"Thailand needs a democratic system where the rule of law and justice system is applied in the same way for everyone, without double standards... for privileged people," Thailand's Move Forward Party, which won a majority of seats at the last election but was blocked from government by the Senate, said in a statement.

"Very sick? Parole? What disease?" Senator Somchai Swangkarn said.

On Sunday, Thaksin was seen being driven away from the police hospital in the capital, where he had spent the last six months.

"Congratulations to PM Thaksin on returning home to Chansongla this morning," government adviser and former energy minister Pichai Naripthapan posted on social media following his release.

"I hope he will have good health and much happiness and warmth from his beloved family," he said.

Thai authorities said Thaksin was eligible for parole due to his age and health issues.

They did not say whether he was released under certain conditions such as monitoring or travel curbs.

Thailand's Prime Minister Srettha Thavisin told local reporters he had no plans to meet Thaksin just yet, but that "everyone in the government is ready to listen" if Thaksin wanted to provide political advice.

Thaksin, Thailand's most successful elected leader, has long been feared by conservative royalists, who have backed military coups and contentious court cases to weaken him.

He left the country in 2008 after being deposed by a coup two years earlier. He spent his exile years mostly in London or Dubai.

His family's Pheu Thai party is currently in power in Thailand.

The former telecoms magnate remains one of the most divisive public figures in the country: loathed by many of Bangkok's rich elite, but adored by millions of poor rural Thais for his populist policies.

Thaksin was the first prime minister in Thailand's history to lead an elected government through a full term in office in 2001-06.