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I checked the below Salesforce Help Link for setup of Extended Mail Merge:- https://releasenotes.docs.salesforce.com/en-us/summer17/release-notes/rn_sales_productivity_ex_mail_merge_setup.htm

But I can't see any user permission which can control the same. I don't want all the users to have the Mail Merge access. Kindly suggest the user permission to restrict the users for the same. Thanks in advance.

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There's no profile permission for this, and the link you've shared is simply the ability enable the enhanced Mail Merge; it only controls if users get the classic mail merge nor not. To stop users from using mail merge, you would need to go in to every single layout and remove the Mail Merge button from the page layout.

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