Ms Small said the fact Latimer was a school principal at the time makes his offending "an abuse of trust at what could only be considered the highest level".
"It is hard to imagine a case more serious, for the possession of image," she said.
Latimer worked at Rangeview Intermediate for six years.
The 48-year-old resigned last February, after an investigation by the Department of Internal Affairs.
He pleaded guilty to the 25 charges in December.
The defence argued that right from the outset, Latimer co-operated fully with authorities.
The thousands of images were stored on CDs, zipped and password protected.
Defence lawyer Simon Lance said by keeping the photographs as secure as possible, Latimer was ensuring nobody else would see them.
But when under investigation, Mr Lance said he was open with authorities about how to access the content.
Mr Lance said his client was very remorseful.
"He feels as though he has betrayed his responsibility to the community, and caused severe emotional pain to his family."
The defence argued that Latimer's extensive collection was down to compulsive behaviour and obsessive hoarding tendencies.
His offending did not involve students from Rangeview Intermediate.
However, the Crown said three images from a school camp were found among the pornographic material.
The former teacher stood calmly in the dock, hands clasped before him, as Judge Nicola Mathers delivered her sentence.
The judge reduced his sentence from a starting point of two and a half years, taking into account his lack of previous convictions, his remorse, and the support of his wife and family.
Latimer's 16 month prison sentence has been welcomed by rape prevention group Stop Demand.
The group said the term of imprisonment handed down by Judge Mathers was a welcome relief, following a recent spate of cases where judges had been handing down "offensively weak" sentences of home detention.
Stop Demand founder Denise Ritchie said the term of imprisonment was "entirely appropriate"."
It reflects the gravity of Latimer's crimes which involved countless child victims, it serves as a deterrent to others, and it signals that New Zealand takes seriously the need to crack down hard on anyone caught fuelling the demand for such material.
"Without market demand by predators like Latimer, there would be no supply."
Ms Ritchie said the impact on the countless children harmed in Latimer's collection could not be overstated.
"Unlike most crimes, where the impact can dissipate over time, victim impact statements taken years later show just how crushing the lasting effects of such crimes can be."
