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Change the following file:

dcredit: number of digit
ucredit: Upper character
lcredit: lower character
minlen: minimum length for the password
difok: difference between old and new password
remember: password history

vc1:/etc/pam.d # cat common-password-vmware.local
#%PAM-1.0
#
# This file is autogenerated by pam-config. All changes
# will be overwritten.
#
# Password-related modules common to all services
#
# This file is included from other service-specific PAM config files,
# and should contain a list of modules that define  the services to be
# used to change user passwords.
#
password        requisite       pam_cracklib.so dcredit=-1 ucredit=-1 lcredit=-1 minlen=8 difok=1 retry=3
password        required        pam_pwhistory.so enforce_for_root remember=1 retry=3
password        required        pam_unix2.so    use_authtok