My parents are green card holders. They do not work in US and they receive a foreign pension from Chile. How do they file it? Which form do they need to use?.

Assuming they are living in the USA, they file normal 1040 series return ( just as if they were citizens here). They may or may not have to report their pension income, depending on the US -Chile tax treaty and the source of pension. Since most treaties are based on residency,  they will probably have to recognize the income here and take tax credit for any taxes paid to Chile ---  however, I would add that you should  at least look at the "taxTreaties" at www.irs.gov.

If you need more on this , consider adding  in comments and one of us will come back and help