Officials at Songkhla Provincial Prison confirmed the inmate had been shot in the eye with a rubber bullet and taken to hospital, where he died of his injuries.
The chaos also left eight inmates and a warden injured, and one building completely gutted.
More than 200 inmates started the riot early yesterday in protest against cell overcrowding.
Some were also lashing out against the rule forbidding them from having plastic bags for their personal use. Some stored belongings in the bags and used them as "mats" to sit on.
Officials had implemented the rule as they were concerned bags could be used to hide prohibited items like mobile phones and drugs, after some inmates had been found dealing drugs from behind bars.
The inmates began the riot by burning their bunk beds and launching an arson attack on a building used for accommodating visiting relatives.
They also called for the removal of prison chief Phiratphon Wongwet.
Authorities mobilised more than 300 security officers including riot control police, border patrol police, marine corps officers and special task force officers to reinforce prison officials who were trying to calm the situation.
However, the anti-riot operation did not go smoothly as many relatives of prisoners who learned of the protest gathered in front of the prison and attempted to upset officials' efforts to restore calm.
Some relatives threw rocks into the prison compound and tried to break open its gates, intensifying their efforts when they heard some prisoners had been shot.
However, the anti-riot task force eventually managed to regain control of the prison around 4pm.
Prison officials confirmed the death of the inmate and said eight more people had sustained minor injuries.
As well as the accommodation building, the prison's learning centre building was seriously damaged in the fire. Fences between prisoners' living quarters were also destroyed.
Officers are searching for the inmates who began and led the protest, Mr Vitaya said.
Following talks between prisoners and officials yesterday evening, the authorities agreed to tackle overcrowding by forwarding the case to the Corrections Department.
Corrections Department deputy chief Rueangsak Suwari and Fourth Army chief Lt Gen Prakan Chonlayuth were present at the talks.
Corrections Department director-general Vitaya Suriyawong said the negotiations helped calm the protest. He was preparing to travel to Songkhla to inspect the situation himself.
Such a riot was expected, he said, as the department had predicted its stricter rules would upset many of the 300,000 prisoners nationwide.
The Songkhla Provincial Prison houses a total of 2,500 inmates. Court cases are still ongoing for 1,500 of them.
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