The de facto leader of the Opposition, Anwar Ibrahim, is in jail for sodomy.
But most analysts think that the ruling coalition will win as the system is greatly stacked in their favour, the economy has performed well recently and the opposition has often appeared disunited.
Sunday's decision means that Mahathir could return as prime minister 15 years after he stepped down from the position.
With the country's most popular opposition leader Anwar Ibrahim now in jail on sodomy charges, the authoritarian who ran the country for two decades is seen as the biggest threat for current premier Najib Razak, who must call an election by August.
He said even former prime minister Tun Ahmad Abdullah Badawi who was successor of Dr Mahathir did not continue some mega projects that were approved during Dr Mahathir's tenure which disappointed the latter.
When he was the prime minister, Dr Mahathir sacked Anwar and then vilified him when he was thrown in jail on sodomy and corruption charges.
But the authoritarian Dr Mahathir who ran the country for two decades is seen as the biggest threat to Prime Minister Najib Razak who is embroiled in a corruption scandal and must call an election by August. In civil lawsuits, the US Justice Department has alleged that about US$4.5 billion was misappropriated from 1MDB. Najib has denied any wrongdoing.
After being released Anwar led the opposition to its best-ever showing in 2013 elections, but was imprisoned again in 2015 under Najib's government.
The four-party PH, when not busy trading barbs with PAS, is split on whether to nominate Dr Mahathir as its candidate for prime minister, should it win the upcoming elections.
The coalition will be hoping that Mahathir, who has set up his own party to take on Najib, will be able to attract votes of from Muslim Malays, who make up about 60 per cent of the population.
Mahathir told The Associated Press in an interview past year that the opposition could win a simple majority in the polls by tapping into anger at Najib's corruption scandal and rising cost of living.
"It is ridiculous. He is over 90 and he started all the problems we are facing", said Facebook user Radha Dulip Singh. "I also hope Sabah will have a strong government, preferably a new one to deal with the federal government, one that will respect the state government irrespective of their political leaning", he said. A survey by pollster the Merdeka Centre last month showed the ruling Barisan Nasional (BN) coalition potentially regaining its crucial two-thirds parliamentary majority, needed to amend the constitution.
After serving his time, Mr Anwar led an opposition alliance to stunning electoral gains in 2013.
Oh Ei Sun, from Malaysian think-tank the Pacific Research Center, said the opposition picked Mahathir as he was "the only viable choice" with Anwar in jail and other potential candidates lacking charisma. "This factor matters the most to on-the-fence voters", he added.