The 33-year-old scored 18 goals in 69 caps for his country, the last of which featured a stunning turn and finish in a 3-2 loss to their old rivals at Wembley.
Miller, who made his international debut in 2001, is currently playing in Canada for the Vancouver Whitecaps after a long career that included spells at Hibernian, Celtic, Rangers and Wolverhampton Wanderers.
"Kenny is a talented player who absolutely gave the best of himself when he was on Scotland duty," Scotland manager Gordon Strachan said.
"In my time as national coach it has been a pleasure to have a player with his ability and experience in the squad.
"He has come to this decision to help prolong his club career and feels that this is the best time to bow out.
"We understand his decision and wish him all the best for the future."
Strachan was scheduled to announce his squad for the World Cup 2014 qualifiers against Belgium and Macedonia later on Friday.
(Reporting by Toby Davis; Editing by John Mehaffey)
