But an election has to be held within 60 days of the dissolution of parliament, she said.
On the other hand, protest leader Suthep Thaugsuban set Monday as the final deadline for the campaign to oust the premier. He called on people across the nation to join a massive rally Dec 9, which he said would be "the final showdown with the government".
Yingluck added she did not want to see parties boycott the elections, and lead to a military coup, as happened in 2006, reports Xinhua.
If the anti-government protestors reject the offer, the political impasse will last even longer, Yingluck said.
But Suthep made clear that Yingluck's resignation or the dissolution of parliament would not put an end to the protests.
He proposed establishing a "people's council" to govern the country, which Yingluck dismissed as infeasible under the constitution.
According to Suthep, all protestors will start march to Government House Monday morning in a final attempt to topple the government.
Utmost efforts will be made to protect Government House in a peaceful manner, Yingluck said.
Thousands of police would be deployed, according to chief of the National Security Council Paradorn Pattnatabut.