Teena Gamzon, 65, filed the lawsuit in Brooklyn Supreme Court against former FDNY Emergency Medical Service Lt. Timothy Dluhos, 35, the New York Post reported.
At the time of his Twitter post, Dluhos' avatar was a picture of German dictator Adolf Hitler and his handle was "Bad Lieutenant."
"It was horrible," Gamzon said after the picture was posted this year. "I'm even embarrassed in front of my granddaughter. She's 10 years old. She has to see her grandmother humiliated like that."
Gamzon said the photo -- which was published on the front page of the New York Post and also on the Daily Mail, Huffington Post and Gothamist websites -- caused her so much emotional pain she was "confined to a bed and home for a period of time."
The FDNY is named as a defendant in the lawsuit, which alleges the city's negligence "was the proximate cause of the ongoing and continuous publication of photographs ridiculing sick and infirmed persons."
Dluhos quit his job after the New York Post reported on his hateful rant on Twitter, in which he referred to Mayor Michael Bloomberg as "King Jew."
Citing sources it did not identify, the Post said Dluhos is employed by Richmond County Ambulance, a private company.