Bolivian presidents are only allowed to serve two consecutive terms according to the Constitution in South America’s poorest nation.
But the court argued that Morales's first term should not count because it predated the current constitution, amended in 2009, the BBC wrote.
Morales, 53, the first indigenous president of Bolivia, came to power in elections in 2005.
His first term in office would have run from 2006 to 2011. Meanwhile, his current term began in 2010 and was to run until 2015.
Critics said the ruling showed that the court was controlled by the government.
Morales would get 41 percent of the vote if the election were held today, according to a poll released last weekend, cited by PressTV.
His closest rival, Samuel Doria Medina, would get 17 percent.
During his years as president, Morales has nationalized private companies, seeking to increase state control over the country’s economy.
He also pushed for the formation of a new Constitution.