Etuhu, 32, had two years remaining on the four-year contract he signed when joining Rovers from Fulham in August 2012.
The midfielder's two seasons at Ewood Park were plagued by injury, with the Nigerian making just 24 appearances.
A statement on Blackburn's official website said: "The club thanks Dickson for his work and dedication during his time at Ewood Park and wishes him all the best for the future."
Etuhu was placed on the transfer list at the end of last season, along with David Goodwillie, Leon Best, DJ Campbell, Jordan Slew and Alex Marrow. Rovers reached an agreement last month for Goodwillie to leave.