Judge Madeline Haikala threw out the case against Eric Parker after his two previous trials ended in hung juries.
CCTV footage last year showed a confrontation between 57-year-old Sureshbhai Patel and two officers in an Alabama suburb.
Mr Patel was thrown to the ground, an incident which he says left him partially paralysed.
In her 92-page opinion District Judge Haikala said evidence presented during Madison police officer Eric Parker's two trials did not eliminate the reasonable doubt that the policeman was guilty of a crime.
"The court has no reason to expect a different result in a subsequent trial given the totality of the evidence that the parties have provided," Ms Haikala wrote.
The footage from police cameras last February shows Mr Patel - who speaks no English - trying to walk away from the officers, who eventually shove him to the ground.
Mr Parker had told jurors that Mr Patel's actions and appearance were "in sequence'" with those of a burglar.
He said Mr Patel tried walking away and wouldn't answer questions when officers approached him, and that he was suspicious when the man reached for his pockets and when he pulled one of his hands free during a pat-down.
Mr Patel had recently arrived in the US to help care for his grandson, who was born prematurely, when the incident took place.
He was walking outside his son's home when police said they received a call from a neighbour about a suspicious person.
According to the civil rights complaint filed in court, Mr Patel told the police officers who stopped him "no English, Indian", and gave his son's house number.
A police officer then threw him abruptly to the ground, injuring him seriously, the complaint said.
In an exclusive interview with the BBC in November 2015, Mr Patel's son Chirag told the BBC that things had been difficult for his Dad since the incident. "Slowly he's making progress and getting independence. But still he's not 100% and we don't know if he's going to get 100%."
But he added that while he wanted justice his family would accept whatever decision the judge made. He said his view of America has not changed.
"It was a land of opportunity, and it still is a land of opportunity. America has changed my life in a positive way. So my views are not changed because of this one incident with my Dad."

Alibaba was taken off the list four years ago, but US authorities say the firm's online platform Taobao is used to sell "high levels" of fake goods.
The company has rejected the allegations, insisting it polices its market place better than in the past.
The firm also suggested the "current political climate" in the US might be why they are back on the list.
US President-elect Donald Trump had, during his campaign, repeatedly accused Chinese firms of stealing intellectual property.
Alibaba Group President Michael Evans said he was "disappointed" by the decision and questioned whether it was "based on actual facts or was influenced by the current political climate."
The Chinese online retailer and its market place Taobao have long been accused of being a platform for counterfeit goods.
Taobao said earlier this year it had tightened controls on its sale of luxury goods, requiring sellers to show proof of authenticity.
In May though, Alibaba was suspended from the International Anti Counterfeiting Coalition (IACC) watchdog over piracy concerns.
Some members, including Gucci America and Michael Kors, had threatened they would leave the IACC in protest at Alibaba's membership.
Alibaba - by far China's biggest online retailer - floated on the New York Stock Exchange in September 2014 and broke records by raising $25bn.
A federal judge in the US has acquitted a policeman who was charged over a serious assault on an Indian man.
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Chinese e-commerce giant Alibaba is back on the US's "notorious markets" list over counterfeit goods sales.