The former Southampton and England player, 40, claimed in his autobiography, 'Taking Le Tiss', he conspired with friends and an unnamed team-mate to cash in on a spread bet on the timing of the first throw-in during a Premiership match.
However, he claimed he did not manage to kick the ball out in time and made no money from the game, a 2-0 win against Wimbledon in 1995.
The matter was referred to Hampshire police after the revelations were published.
A Hampshire police spokesman said: "Following discussions with the Crown Prosecution Service (CPS), a decision has been made not to investigate an alleged historic and unsuccessful spread betting incident at a Saints (Southampton) football match in the 1990s.
"Discussions with the CPS have led to the conclusion that an investigation into the incident would not be in the public interest and does not represent appropriate use of police resources.
"The incident itself was bought to the attention of the police after it was mentioned in a recently published autobiography."