"There are more important things now," Rafalski said.
The 37-year-old defenseman had knee and back injuries that limited him to a career-low 63 games last season, putting him on the training table every day for treatment.
"How much fun is it to come to the rink when you can hardly walk?" Detroit coach Mike Babcock asked, adding he's thrilled Rafalski is leaving on his terms.
Rafalski scored just four goals last season, but made a big impact in previous seasons with the Red Wings and New Jersey Devils during his 515-point career. He helped the Devils win two Stanley Cups and Detroit hoist one.
The native of Dearborn, Mich., played at Wisconsin and was relegated to playing overseas when NHL teams didn't give the undersized player a shot.
"He's an incredible story, a 5-foot-9 defenseman that was never drafted and spent four years in Europe," Red Wings general manager Ken Holland said. "It was a great move by the New Jersey Devils to sign Brian Rafalski. In 11 years, he played five times in the Stanley Cup finals, was a three-time Stanley Cup champion and the best defenseman at the Olympics in 2010."
Rafalski played for the U.S. in losses to Canada in the 2010 and 2002 gold-medal games. He also played for the team that finished eighth at the Turin Olympics in 2006.
"He did a lot of good things for U.S. hockey, winning the silver medal with very different teams," former teammate Chris Chelios said.
Rafalski was the oldest player on a youth-infused team last year in Vancouver, where he scored twice and had an assist for the Americans in a stunning win over Canada in a preliminary round game and he helped them advance to the gold-medal game. He was a relative youngster among the veterans on the U.S. team that earned silver at the Salt Lake City Games in 2002.
The Red Wings' postseason run this year ended in the second round, when Rafalski and his family knew his career was over. He decided to retire a couple months ago, but said he didn't start to inform his teammates until this week.
"I was shocked," Detroit goaltender Jimmy Howard said. "I was down in Miami on vacation and I got a text message that Brian was retiring."
Rafalski's decision clears $6 million in salary-cap space for the Red Wings, who are hoping defenseman Nicklas Lidstrom announces soon that he'll play a 20th season in Detroit.
"I'm crossing my fingers and toes every night when I go to bed, hoping that we get good news on Nick," Holland said.