Parks, 91, rarely has been seen in public since 2001, when she canceled a meeting with President Bush.
The black woman made history when in 1955 she refused to give up her seat to a white man on a Montgomery, Alabama, city bus. Her arrest triggered a 381-day boycott of the bus system organized by a then little-known minister, the Rev. Martin Luther King Jr. She became known as "the mother of the civil rights movement."
The historic event will be the subject of a U.S. postage stamp next year.
Parks' lawyers said this summer that she has been in frail health, but Monday's court filing is the first public description of her health problems.
Her lawyer Gregory Reed confirmed that she has dementia, or severe mental impairment.
"It comes and goes," Reed said. He said Parks is well cared for and receives care at her Detroit home.
Parks' lawsuit says that the 1998 song "Rosa Parks" by OutKast violated her publicity and trademark rights and defamed her. It also says that OutKast and record company BMG exploited her name for commercial purposes. OutKast has been dismissed as a defendant.
Lawyers for the defense have asked to interview Parks to explain her claims that she suffered emotional and mental distress because of the song.
Defense lawyers will be able to question Parks' doctor Joel Steinberg about her medical condition in early October.