Rodriguez was charged by the Football Association in February following allegations that he used abusive or insulting language towards Brighton & Hove Albion's Cameroon defender Gaetan Bong in a Premier League match the previous month.
Rodriguez, who has played for England, denied the charge and requested a personal hearing which took place at the FA's headquarters at Wembley Stadium on Wednesday.
"It was alleged that during the game against Brighton and Hove Albion on 13 January 2018, the player used abusive and/or insulting words which included a reference to ethnic origin and/or colour and/or race," the statement said.
"Having considered all the evidence, the Independent Regulatory Commission determined that on the balance of probabilities the allegation was not proven."
In a statement following the verdict the FA said there had been no suggestion the complaint was malicious or fabricated.
"The FA is completely satisfied that this was a complaint made in absolute good faith," the governing body said.
"The FA takes all allegations of discrimination extremely seriously and continues to encourage all participants who believe that they have been the subject of or witness to discriminatory abuse to report this through the appropriate channels."
West Brom backed Rodriguez, 28, throughout the process.
"We have welcomed the verdict of an FA hearing which has dismissed an allegation of racist abuse by Jay Rodriguez," the club said on its Twitter page.
(Reporting by Martyn Herman; Editing by Ken Ferris)
