The 42-year-old British-Iranian dual national, has been detained in Iran since 2016, when she was sentenced to five years in prison over allegations, which she denies, of plotting to overthrow the Iranian government.
She has been afforded diplomatic protection by the UK Government, which argues that she is innocent and that her treatment by Iran failed to meet obligations under international law.
Mr Hunt has written in The Times that for diplomatic protection to have meaning, there had to be consequences for Tehran.
“It is not clear to me that there have been any; something that is beginning to make us look weak”, he said.
He added: “We must show the world that if you imprison a British citizen on trumped-up charges you will pay a very heavy price because Britain is a major player on the world stage and intends to remain one.
“Allowing ourselves to be pushed around like this at the moment of post-Brexit renewal sends the opposite signal.”
Mrs Zaghari-Ratcliffe is serving home detention after being furloughed from prison in March due to the coronavirus pandemic.
Her six-year-old daughter Gabriella appeared in a 10-minute video released by Amnesty International on December 21, in which she wrote a Christmas card to Prime Minister Boris Johnson and called for him to bring her mother home.
Titled Two Daughters, the video also featured 34-year-old Elika Ashoori, whose father – retired 66-year-old engineer and dual national Anoosheh Ashoori – has been held in Iran since August 2017.
Tehran has linked both cases to a 40-year-old £400 million debt owed by the UK to Iran.
But on November 3, foreign office minister James Cleverly told the Commons the debt was not related to Mrs Zaghari-Ratcliffe’s imprisonment, adding that the Government was “deeply concerned” about new charges issued against the British national.
Shadow foreign secretary Lisa Nandy at the time called on the UK Government to resolve the issue of the historic debts and called the treatment of Mrs Zaghari-Ratcliffe by Iranian officials as “tantamount to mental torture”.
She said: “Resolving this issue, which has dragged on for decades where there is a clear UK legal obligation, where the Defence Secretary has described the UK’s behaviour as ‘un-British’ and ‘obfuscatory’, holds the prospect of putting our relations with Iran on a better footing.”
Mr Hunt wrote in The Times that sanctions on Iran should not prevent repayment of the debt, which he suggested could be paid in the form of medicines.
Mrs Zaghari-Ratcliffe’s original sentence is due to end on March 7 next year, but she appeared in court in November on charges of spreading propaganda against the regime.
Her husband, Richard Ratcliffe, termed the charges “spurious”, saying the case presented the same evidence used when she was convicted in 2016.
Mr Ratcliffe also said last month’s release of a British-Australian academic by Iranian authorities showed a “light at the end of the tunnel”.
PA Media contributed to this article