The ministry recently received a letter from the Office of Her Majesty the Queen's Private Secretary, stating the Queen was afraid the inappropriate performance would mar the image of Thailand as a centre of Buddhism.
The "highly seductive dancing" was shown in TV footage during the broadcast of the Rocket Festival, held as part of the ceremony in the northeastern province.
Although the dancing was held outside a temple, it was considered inappropriate because it coincided with other religious activities held at the end of Buddhist Lent, Khunying Khaisri said.
"Coyote" dancing has become increasingly popular in bars and pubs in Thailand following the 2000 movie Coyote Ugly, which featured women in short, tight outfits performing flirtatious dances. Merchants use it to promote their products.