Badawi received 50 lashes earlier this month, the first of 20 weekly floggings he was sentenced to along with 10 years in prison for "insulting Islam".
The letter urging Saudi academics "to be heard arguing for the freedom to dissent" is signed by laureates of Nobel prizes in chemistry, physics, physiology or medicine, and by literature prize winner John Coetzee.
Addressed to the president of King Abdullah University of Science and Technology (KAUST) -- set up to increase the country's international profile in science and technology -- the letter indicates the university risks being isolated by international academia.
"We write out of concern that the fabric of international cooperation may be torn apart by dismay at the severe restrictions on freedom of thought and expression still being applied to Saudi Arabian society," the letter read.
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"We have no doubt that members of KAUST share that concern, aware that the cruel sentence passed, for example, on Mr. Raif Badawi who established a forum for open discussion, sent a shock around the world," it said.
"We are confident that influential voices in KAUST will be heard arguing for the freedom to dissent, without which no institution of higher learning can be viable," the letter said.
It adds that the "time is ripe for new thinking" after Saudi Arabia's ambassador to France demonstrated in a March to support free speech after the killings of staff members of satirical magazine Charlie Hebdo.
Jailed since 2012, Badawi is co-founder of the Saudi Liberal Network and is described by Amnesty International as a "prisoner of conscience".