Hooda's recommendation to the Home Ministry came hours before the meeting of its award committee to discuss the issue.
In a letter to Union Home Minister P Chidambaram, Hooda said Rathore has brought "disrepute and bad name" to the state and the police forces.
The letter also mentions "moral turpitude" on the part of Rathore in the case.
A meeting of the award committee, headed by Union Home Secretary G K Pillai, will take a decision on the withdrawal of the 1985 Police medal to Rathore for meritorious service.
Sources said the committee is also likely to take a decision on automatic withdrawal of all police medals given to officers who are convicted.
If the committee decides to withdraw Rathore's medal, a recommendation will then be sent to the President.
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