On Monday, Mohammad Khatami said: "Iran supports [Iraq's] stability and a democratic government.
"Those backstage at the Arab summit who speak of Iran's interference in Iraqi affairs - this is false."
The 22-member Arab League is holding its annual summit in Khartoum and is expected to call for a greater Arab role in Baghdad amid fears of Shia Iran's influence in its western neighbour.
Khatami also endorsed efforts to form an Iraqi national unity government, which have stalled for more than three months after an election amid political squabbling and a surge in sectarian violence.
He said: "Following the example of Grand Ayat Allah Ali Sistani, we believe that Iraq has no choice but to form a democratic government representative of all the factions.
"A Sunni, Shia or Kurdish government would not have any measure of success in ruling Iraq."
Khatami was succeeded by Mahmoud Ahmadinejad in August after serving the maximum two terms in office.
Khatami also defended Tehran's talks with the US concerning Baghdad, which has raised alarm among Iraq's own Sunni Arab population and the Arab League.
"It does not mean that Iran meddles in Iraqi affairs because Iraqi officials asked us to do this."
Abd al-Aziz al-Hakim, an Iraqi Shia leader and a Tehran ally, called for talks between Washington and Tehran on 16 March. His request was quickly accepted by Iran's leaders.
"It does not mean that Iran meddles in Iraqi affairs because Iraqi officials asked us to do this"
former Iranian president
Official high-level direct talks between Iran and Washington would be the first since the sides broke diplomatic relations in 1980 after Iran's US-backed shah was deposed in a revolution.
Khatami blamed Washington for Iraq's downward spiral since the fall of Saddam Hussein's government in April 2003, amid US allegations that Tehran has funded and supplied arms to the Iraqi uprising.
He said: "We believe the occupation is responsible for these events", adding that the US "struggle against terrorism" was having a "contrary effect, with the occupation attracting extremists".
Khatami also defended Iran's controversial nuclear programme, which Tehran says is for peaceful energy purposes while the West charges that its aim is to obtain an atomic bomb.
He said dialogue was the only way to resolve the tense standoff that could see the UN Security Council impose sanctions on Iran over its nuclear programme.