In an interview with Sveriges Television the retired politician said his own Social Democratic party and the Moderates are too similar, which he argued cost them votes at the polls.
"I think the success of the Sweden Democrats depends partly on the triangulation, the tendency not to take risks with policies, not to show the differences, which the Moderates introduced and the Social Democrats have also taken after.
"One lays so close to the other so that when one is angry and resigned there is nowhere else to protest," Persson told the Agenda programme.
Persson, who was Prime Minister from 1996 to 2006, said the Sweden Democrats did well outside of the capital as they were able to tap into voters who were fed up with the established parties.
He added that in places where there is "poor mobile phone coverage" and "trains that don't run" that the nationalist party performed better.
"All of this has been expressed. Sweden is falling apart," he said.
Persson added; "Now we have a very clear warning, a real slap in the face for the Stockholm establishment in the form of these election results."
Meanwhile, the final turnout for the election has been revealed at 85.8 percent – an increase of 1.24 percent compared to 2010.
The figures are the highest for a Swedish general election since 1994. Every election since 2002 has recorded an increase in the number of people voting.
Election experts at the University of Gothenburg said the debate surrounding immigration likely helped spike numbers this time round.
"A key to this is the conflict in the refugee/immigration question. It has expanded in dimension and the Sweden Democrats have grown stronger and mobilised in every part of the country," Henrik Ekengren Oscarsson, a researcher at the university, told the TT news agency.
Ekengren that the support for Feminist Initiative (FI) in various parts of the country also played a part in the high turnout. FI earned 3.1 percent of the vote, just short of the 4 percent threshold to earn a spot in parliament.
Outgoing democracy minister Birgitta Ohlsson said she welcomed the news of the increased turnout.