Folbigg was jailed in 2003 for killing her four children – Sarah, Caleb, Laura and Patrick.
She is serving a 25-year minimum sentence after being found guilty of three counts of murder and one of manslaughter, but has always maintained her innocence.
Former NSW chief justice Tom Bathurst KC is heading the judicial inquiry, which began hearing closing submissions on Wednesday.
“On the whole of the body of evidence before this inquiry, there is a reasonable doubt as to Ms Folbigg’s guilt,” counsel assisting Sophie Callan SC said.
The Director of Public Prosecutions accepts it is open to the inquiry to conclude a reasonable doubt about Folbigg’s guilt.
New and additional evidence had emerged and “altered the balance” since her 2003 conviction, Ms Callan said.
Submissions on Folbigg’s behalf urged Mr Bathurst to go as far as finding “a strong probability” of innocence.
The inquiry continues.