The Italian crashed with about four kilometres left on l'Alpe d'Huez but got up and ended the stage in seventh place, 13 seconds behind winner and race leader Geraint Thomas.
Nibali was later taken to hospital where scans revealed a fractured vertebra.
The 33-year-old Italian, who was fourth in the overall standings - two minutes and 37 seconds off the race lead - was following an attack from Chris Froome when he suddenly hit the ground but he did not assign any blame for the crash.
"There were two police motorbikes and the road became narrow, there were no barriers and Froome attacked, traffic slowed down and I fell," said Nibali.
"My back hurts. I had trouble breathing and now I don't feel well standing."
Nibali said on his Twitter account that he will return home on Friday for recovery.
(Reporting by Julien Pretor; Writing by Frank Pingue; editing by Toby Davis)
