Foster played a key role in helping the Welsh team bet back in the English Football League, making 12 appearances during his time at the club, which is owned by Hollywood stars Ryan Reynolds and Rob McElhenney.
He came out of retirement to sign a short-term deal with Wrexham in March before saving a stoppage-time penalty against Notts County the following month to put Wrexham within touching distance of automatic promotion from the National League.
"The honest truth is that my performances this season haven't reached the level I demand of myself, and I feel that now is the right time to retire," Foster said in a statement.
"At the forefront of my mind when making this decision was not only what was best for me but also the club, and making the decision now gives the club every opportunity to assess their options before the (transfer) window closes.
"Wrexham will always have a special place in my heart."
