The fire destroyed the first floor and damaged the facility's other three floors before it was extinguished, The Mainichi Shimbun reported.
Eight of the victims were patients while the other two were the hospital's former director and his wife, who were living at the institution, police said.
Five people were injured, officials said. Three people escaped.
Eighteen people -- 13 patients and five employees -- were in the 19-bed hospital when the fire broke out, police said. Prefecture police said they suspected the fire started on the first floor and an investigation into its cause has begun.
The facility is run by the medical corporation Iryu-kai, the newspaper said.
"We are very sorry for causing such a serious situation. We will make our utmost efforts to respond to our patients," Tetsuji Kunimitsu, the hospital's clerical manager, told Mainichi near the scene.
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