The correct indirect form of "He said 'You had better see a doctor'" is:

"He advised me to see a doctor."

Here’s why:

• "He advised me to see a doctor" correctly reflects the original statement's meaning, where "had better" is transformed into a suggestion or advice.
• "He advised that he should see a doctor" is incorrect because it changes the subject from "you" to "he."
• "He suggested that he had seen a doctor" is incorrect because it changes the time reference and meaning.
• "He proposed to see a doctor" does not accurately convey the sense of advice or suggestion implied by "had better."