This issue is caused by a Windows registry key accumulating a large list of printers from current and former sessions.

To resolve the issue, implement the Terminal Services Easy Print driver.

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Note : Incorrect changes to registry settings can cause serious system problems that may be irreversible without reinstallation of the operating system. You must back up your registry before making any registry changes. We are not responsible for damage resulting from incorrect use of the Registry Editor.

1.  Open the Registry. (Go To Start, Run, Type Regedit, and press enter.)
2.  Browse to HKEY_CURRENT_USER\Software\Microsoft\Windows NT\CurrentVersion\Devices
3.  Remove any invalid printers listed in this key.
4.  Log out of the terminal server session then log back in.