The 35-year-old was on-loan at Championship side Ipswich this season, but made just three appearances after affected the injury in September.
Walters played 600 club and worldwide games, scoring 131 goals.
“It has already been epic,” Walters composed on Twitter. “I’m now retired from playing football”
He added:”Is not it ironic. . .my Achilles heels has literally been my Achilles heels and finished me off! Veni vidi vici,” a Latin phrase imputed to Roman emperor Julius Caesar that translates as,”I came, I saw, I conquered.”
Walters played a big part of his livelihood in the Premier League with Stoke where he was an FA Cup runnerup in 2011, as well as playing five seasons in the Championship with Ipswich, where he also won the club’s Player of the Year award in 2007.