In a commentary in the Times, the India-born writer said such reforms would also combat the Jihadist ideology that led to the July 7 London terror attacks, reports the BBC.
Rushdie, who was once under a death fatwa from Iran's Ayatollah Khomeini for his book "The Satanic Verses," said, "What is needed is a move beyond tradition -- nothing less than a reform movement to bring the core concepts of Islam into the modern age.
"A Muslim Reformation to combat not only the Jihadi ideologues but also the dusty, stifling seminaries of the traditionalists, throwing open the windows of the closed communities to let in much-needed fresh air."
He also argued the Koran should be studied as a historical text rather than treated as "infallible," the BBC said.
"If, however, the Koran were seen as a historical document, then it would be legitimate to reinterpret it to suit the new conditions of successive new ages," he said.