In July, the high-profile activist was found guilty of "disseminating rumours and false information" and sentenced to two years in prison over television interviews critical of the Bahraini government.
He had appealed the sentence but a lower court upheld it in November and Monday's verdict means he can no longer appeal the jail term.
Rajab also faces a potential 15-year sentence in a second case linked to tweets in which he criticised Saudi Arabia and its allies, including Bahrain, for their role in the Yemen war.
Bahraini rights groups the Bahrain Institute for Rights and Democracy and the Bahrain Center for Human Rights, which was founded by Rajab, both confirmed Monday's high court decision.
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International rights groups, including Amnesty International and Human Rights Watch, have criticised the Rajab trials, with Amnesty slamming them as "farcical".
Home to a majority Shiite Muslim population, the Sunni- ruled Gulf kingdom has been rocked by unrest since security forces cracked down on Shiite-led protests in 2011 demanding a constitutional monarchy and an elected prime minister.
Bahrain is located between Saudi Arabia and its arch- rival Iran and has been ruled for more than 200 years by the Al-Khalifa dynasty.
Authorities accuse Shiite Iran of backing the protesters and inciting unrest, a charge Tehran denies.
Bahrain is home to the US Fifth Fleet and a British military base that is still under construction.