The United star, 34, won 81 caps for his country having made his debut back in 1997, but was discarded by Hodgson for Euro 2012 and withdrew from the squad having finally earned a recall in March.
Hodgson, who courted controversy in October of last year when pouring cold water on Ferdinand's chances of inclusion during a discussion with passengers on a London tube train, has now championed the centre-back's achievements.
The England boss said: "It is important to pay tribute to someone of Rio's stature and the achievements he had in a senior international career with England over 14 years at the highest level.
"To have captained his country, to play at three World Cups and indeed score in one of those, marks him out amongst a very special group of players.
"I appreciated the call from Rio to inform me of his decision, which clearly he had spent much time considering before reaching this point.
"I wish him all the best in his club career, and I'm sure the former managers he played under and every England fan will join me in thanking him for his service."