The Dons hero and former Director of Football believes that clubs must listen to their fans even if it plunges the game into financial hardship.
SFL clubs are at Hampden today discussing proposals drawn up by the SFA, SPL and SFL to restructure the game and parachute 'newco Rangers' into the First Division.
SPL clubs will then vote tomorrow on the fate of the newco, with Aberdeen chairman Stewart Milne vociferously refusing 'newco Rangers' entry into the SPL.
And former director Miller has warned that despite the current financial climate, SPL and SFL clubs can't afford to ignore the strength of feeling amongst angry supporters demanding Rangers receive appropriate punishment.
Plus the fans' favourite has also slammed the way long-awaited league reform has only become a viable prospect in the wake of the Ibrox crisis.
He told the Daily Mail: "Rangers should be punished for the mistakes they made. Fans of other clubs have made their views clear and most seem to want them to start life again in the Third Division. Going to the bottom rung of the SFL would help Rangers clean up their past errors.
"There has been talk of trying to find a way where a Rangers newco will be in the First Division. But clubs must listen to what their fans want to happen to Rangers. If the game suffers financially, so be it.
"Scottish football should not be reorganising just because of Rangers’ problems."