Polls are to take place next year, and Sadr supporters had previously demonstrated for changes to the law and to the country's electoral committee, which is dominated by affiliates of powerful political parties.
If "the law remains... this means that we will order a boycott of the elections," Sadr said in televised remarks made at a demonstration at Baghdad's Tahrir Square.
The cleric did not specify the specific changes he wants to take place, but the current law has been criticised as being biased towards large political parties over smaller ones.
The UN has backed demands for electoral reform, urging parliament last month to "finalise the ongoing review" of the election law and the electoral commission.
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Sadr is the scion of a powerful clerical family who in earlier years raised a rebellion against US-led forces and commanded a feared militia.
He had lost some of his political influence in recent years but has brought himself back into relevance by calling for demonstrations to push for reforms.
His supporters broke into Baghdad's fortified Green Zone area, where the government is headquartered, on several occasions last year, and clashes at a Baghdad protest left seven people dead last month.
Demonstrations calling for improved services and opposing widespread corruption broke out in the summer of 2015, drawing pledges from authorities that reforms would be made that ultimately led to little in the way of lasting change.
The protest movement eventually flagged, but Sadr subsequently revitalised it by calling for his supporters to take part in demonstrations starting last year.