Chen was ordered Tuesday to be held in custody for an additional two months. He was first detained Dec. 30, Xinhua reported.
Chen, who is accused of corruption, could face life in prison. Officials say he took bribes worth $29 million.
A Taipei court noted Chen's attempts to delay his prosecution when it ordered him detained further.
"Under the current circumstances, it will be very hard to hold more trials if Chen Shui-bian is not detained," the court said.
Since Chen was likely to destroy or change evidence and collude with witnesses, it wouldn't be effective enough not to confine him, the court said.