Although Miandad's contract was due to expire in April 2005, Englishman Bob Woolmer replaced him as coach of the Pakistan team in July, a month after Miandad was sacked by the Pakistan Cricket Board.
"The manner in which the PCB unlawfully terminated Miandad's contract brought great pain and injury to his honor and dignity in the eyes of his die-hard fans and the cricketing world at large," Miandad's lawyer, Mohammad Ali Qureshi, said in a legal notice served to the board's chairman, Shahryar Khan.
He said Miandad is seeking a "suitable public apology" from the board.
"In case the same is not done, we have instructions from Miandad to take appropriate legal action against PCB," the notice said.
Cricket board spokesman Abbas Zaidi confirmed that it had received the notice and would discuss the matter with its "legal advisers before taking any appropriate measures."
Miandad took over as coach after Pakistan failed to go beyond the first round of the World Cup in South Africa in March 2003.
Under Miandad, Pakistan won a quadrangular tournament in Sharjah and also qualified for a triangular series in Sri Lanka before going down 2-1 against England in the three-match one-day series.