Faezeh Hashemi, the daughter of the former president, was imprisoned in late 2012 for making propaganda against the state. She was banned from political activity for five years.
Gholamali Riahi, her lawyer, said she was released from prison after serving a six-month term, state-funded broadcaster Press TV reports.
Rafsanjani was criticized by the conservative leadership for backing opposition leader and former Prime Minister Mir Hossein Mousavi during 2009 elections. Post-election violence that year sparked unrest not seen since the Islamic Revolution in 1979.
Iranian presidential elections are scheduled for June. Incumbent President Mahmoud Ahmadinejad is ineligible to run due to term limits.
Rafsanjani, who served two consecutive presidential terms beginning in 1989, said last year he was "no longer ready for this job (of president)."