Suge Knight knows A LOT about what went on behind prison walls with Erik Menendez — the things that got the Parole Board to turn thumbs down — and he thinks the decision is BS.

The Death Row Records founder — who is locked up in San Diego’s RJ Donovan Correctional Facility alongside the Menendez bros — told “TMZ Live” Friday the game’s rigged … inmates are set up to fail, so it’s no shock they shredded Erik over his past infractions.

While Erik got dragged for sneaking a phone, making calls, hustling drugs, and even dabbling in tax fraud … Suge told us what really stings is how none of Erik’s positive rehabilitative efforts got a proper shout-out.