The three who died in the fire on Sunday night were all foreign tourists, Police Colonel Sanong Saengmanee told The Associated Press.
One was found dead at the scene and the other two died after being taken to hospital.
The fire erupted on the fifth floor of the six-storey Ember Hotel, police said.
Khao San Road is a popular backpacker street in the Thai capital that's also known for its lively nightlife.
The flames were eventually contained and the cause of the blaze is under investigation.
Seventy-five people were staying at the hotel at the time of the fire.
Seven people were injured, including two Thai nationals and five foreigners.
Sreekanth Kolamala, a 37-year-old Indian national who lives in Singapore and was in Thailand on holiday, witnessed the rescue operation and said firefighters "broke the glass over there to try to pull people out".
Sanga Ruangwattanakul, the president of the Khao San Road Business Association, stood outside The Ember Hotel on Monday, looking at the damage.
He said 20,000 people were expected at a New Year's Eve countdown event on Tuesday night.
Bangkok Governor Chadchart Sittipunt also emphasised the importance of safety following the incident, especially as New Year's Eve approaches, with fireworks and other celebrations planned across the city.
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