Lawmakers in the State Duma are chosen from a list based on the national votes each party recevies. Putin's measure would split membership in the 450-member lower house of Parliament between candidates chosen from party lists and those elected directly.
"Everyone must fight for themselves," a Kremlin source was quoted by state-owned news agency RIA Novosti as saying.
Anti-government sentiment in Russia escalated in late 2011 when the United Russia Party, once led by Putin, maintained its leadership in State Duma elections. Putin's re-election to a third non-consecutive term as president last year sparked further protests.
Putin has faced criticism for his crackdown on opposition voices following the election. Early this week, authorities accused opposition leader Alexei Navalny of faking lawyer credentials.
Navalny led street demonstrations against Putin after the election. He was quoted by RIA Novosti as saying the allegations against him were "strange."