The 43-year-old, who was Tottenham's third-choice keeper this season, will return back to the U.S. where he will work as a TV pundit for Fox Sports.
"I'm incredibly proud of what I've achieved in my career," Friedel, capped 82 times by the U.S., told Tottenham's website.
"When I first started the journey I never imagined it would be this long, playing 23 seasons in total and representing some incredible clubs."
Friedel holds the record for the most consecutive starts in the Premier League -- an incredible 310 -- before Frenchman Hugo Lloris took over as Tottenham's number one in 2012.
Friedel made 356 appearances for Blackburn with whom he won the League Cup, more than 100 for Villa and 67 for Tottenham.
Tottenham manager Mauricio Pochettino said on Friday that Friedel could feature in one of Tottenham's two remaining matches of the season.
An outing against Hull City at home this weekend or at Everton would see him pass former Manchester City keeper John Burridge as the Premier League's oldest player.
Burridge played aged 43 years and 162 days. Friedel will be 44 on May 18.
(Reporting by Martyn Herman; editing by Toby Davis)
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