Dr. Charles E. Meredith, 51, a mental health administrator with a reputation for readying patients for placement in the community, has been selected as the new administrator of trouble-plagued St. Elizabeths Hospital. Washington's federal psychiatric hospital, according to sources in the Department of Health, Education and Welfare.

In 1970, Meredith was chosen by then Gov. Linwood Holton to head Virginia's mental health system. But Meredith changed his mind eight days before he was to take the post, citing personal and financial reasons.

Meredith now is superintendent of the Augusta Mental Health Institute, in Augusta, Maine. This is the third time that his name has figured in selection of a new superintendent of St. Elizabeths.

HEW Secretary Joseph A. Califano Jr. will announce Meredith's selection at a press conference Thursday at the hospital. At the same time, Califano will name James Buford, administrator of social services in Newark, N.J., as Califano's personal representative at St. Elizabeths.

Sources said that Buford's responsibilities will include regaining accreditation for the overcrowded, understaffed and physically deteriorating hospital complex in Southeast Washington.

In June, 1976, Dr. Bertram S. Brown, director of the National Institute of Mental Health, announced selection of Dr. Ulysses E. Watson of Philadelphia as superintendent-designate. At that time, Meredith's name had figured in speculation about the appointment.

Dr. Roger Peele, acting superintendent of St. Elizabeths, attempted to block Watson's choice, contending that Watson had been selected principally because he is black. Peele, who is white, said he had been a victim of reverse discrimination and asked the U.S. District Court to prevent Watson's appointment to the job until the issue was resolved.

The court refused to block Watson's appointment, but did agree to rule on Peele's contention that he should have been named. Because of the controversy, however, Watson withdrew. Peele's case is still pending before the court and the superintendency has remained vacant.

Meredith is white. Buford is black.

Peele said yesterday that he is not sure whether he would try to block Meredith's appointment through another separate court action.

"If the court finds in my favor (in the pending case)," Peele said, "the appointment of Dr. Meredith could be vacated." Peele is still serving as acting director of the hospital.

HEW sources said Meredith was Brown's first choice for the directorship almost 10 years ago. At that time, however, Meredith rejected an offer of the post.

Filling the superintendency is one of the first steps towards a possible turnover of the hospital to the D.C. Government. But the choice apparently was made with little or no input from Mayor Walter E. Washington or the D.C. Department of Human Resources.

Sam Eastman, the mayor's press secretary, said yesterday that he was not sure whether the mayor had been informed of or consulted about the selection. 'My guess is that he hasn't been consulted,' Eastman said. "My feeling is that if there was some kind of communication like that it would be on Russo's level."

DHR director Albert P. Russo said yesterday that he did not know who the new superintendent would be. And, according to one source, neithr did Dr. Jefferson R. MacAlpine, head of DHR's Mental Health Adminintration.

Three of every four patients in the hospital are D.C. residents, and most of the outpatient clinics serving St. Elizabeths patients are licensed by DHR.

Meredith, a native of St. Johns, New Brunswick, Canada, is a magna cum laude graduate of Loyola College of Montreal and a graduate of McGilt University Medical School.

He served his internship at Montreal General Hospital and then was a resident in psychiatry at Connecticut Valley Hospital in Middletown, Conn. After two yeas service in the Navy, Meredith returned to Connecticut Valley as assistant superintendent.

In 1963, he was appointed superintendent of Colorado State Hospital in Pueblo. During his tenure there, Meredith virtually emptied the instituition, reducing its population during this 13 years service from 6,000 to 1,000.

His belief in returning treated mental patients to their communities meshes well with previous plans for reducing the patient population at St. Elizabeths, where many people whose only "illness," is old age or oddity have been "warehoused" for years.

The Augusta facility that Meredith now heads is a 300-bed hospital that serves Portland, Lewiston and Auburn, Maine, as well as Augusta.

He is married and the father of eight children, ranging in age from 24 to 14.