"The petition has been submitted to seek royal assistance to stop the people's suffering," Nattawut Saikur, a protest leader, told AFP news agency.
Monday's rally is the latest show of support for Thaksin by the red shirts, as his followers steadily rebuild momentum after a few months of relative calm in the capital.
"I would like to say thank you to my fellow Thais, who have a good attitude towards me and to Thailand"
former Thai PM
The submission of the petition has been criticised by opponents who say it is an attempt to drag Thailand's widely-revered royals into a political argument.
Abhisit Vejjajiva, the Thai prime minister, has described the petition as illegal, warning Thaksin's supporters against signing it and that only Thaksin or his family are allowed to submit a request for a royal pardon.
Red shirt leaders however say the Ahbisit's government itself is illegitimate and the result of a parliamentary stitch-up engineered by the army.
They remain angry over the way Abhisit took power in December last year following a court ruling that removed a government made up of Thaksin allies from power.
Whether or not the pardon is granted, protest organisers said Monday's rally would remain a visible demonstration of the support Thaksin still carries in Thailand and opposition to the current government.
At around midday Monday, Thaksin, who was deposed in a bloodless coup in 2006, addressed the crowd of supporters by video from an undisclosed location.
| Protest leaders say they wanted to show that support for Thaksin remains strong[EPA]
"I would like to say thank you to my fellow Thais, who have a good attitude towards me and to Thailand," Thaksin said.
"We are here today to inform our father, the King of every Thai, that we want to see unity and reconciliation."
Thaksin returned to Thailand in early 2008 but fled the country months later, shortly before Thailand's supreme court found of him guilty of conflict of interest and sentenced him to two years in jail.
He has been in exile ever since travelling between residences in, among others, Dubai, Hong Kong and Nicaragua - which has appointed him a special ambassador to promote investment in the central American country.
Most commentators say the motive behind the petition is to highlight Thaksin's continued mass support and keep his movement alive.
The pro-Thaksin Red-Shirts and their rival Yellow-Shirts who support the current government have conducted a series of demonstrations in the Thai capital over the past 16 months, effectively bringing the city to a standstill.
In April a massive protest by thousands of Thaksin supporters culminated in deadly street battles that pitted the Red Shirts against the Thai army.
At least two people were killed and more than 100 injured in what was the worst violence seen in the country for decades.
Four prime ministers in the last 15 months have failed to resolve Thailand's deep political rift which continues to pit the military and business elite against a rural majority loyal to Thaksin.