Ismail Hakki Karadayi was detained at his home in Istanbul and taken to the capital, Ankara, for questioning.
He is suspected of helping what became known as the post-modern coup, as no soldiers were involved.
Former Prime Minister Necmettin Erbakan was forced to resign in 1997, being replaced by a civilian government.
In May, another six retired generals linked with Necmettin Erbakan’s removal from power were charged.
Separately, investigations are continuing into allegations of attempted coups by the military.
Turkey’s military has long seen itself as the guarantor of the country’s secular constitution, analysts say.
It staged three coups between 1960 and 1980 and has a history of tension with the Justice and Development Party (AKP) of Prime Minister Recep Tayyip Erdogan.
A Turkish court sentenced three former army generals to 20 years in jail each in September for plotting another coup. Nearly 330 officers were convicted of involvement in the plot.
They were accused of plotting to bomb mosques and trying to trigger a war with Greece in order to justify a military coup against the elected government of Recep Tayyip Erdogan in 2003.
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