The Everton midfielder was set to serve a three-match ban after he was shown a straight card by referee Martin Atkinson for a tackle on Liverpool striker Luis Suarez which appeared neither dangerous nor reckless.
The decision was subsequently overturned by the Football Association and Rodwell will now be available for Everton's next Premier League match at Chelsea.
Change of heart: Rodwell's red card in the Merseyside derby has been overturned
A statement on the FA website read: 'Everton's Jack Rodwell had had his claim for wrongful dismissal upheld.
'As a result, the three-match suspension handed to him has been withdrawn.
'Rodwell had originally received a red card for serious foul play in the Merseyside derby against Liverpoolat Goodison Park on Saturday 1 October.'
Jack's the lad: Rodwell will be available for Everton's trip to Chelsea
Immediately after the match, which Everton lost 2-0, Toffees boss David Moyes expressed his amazement at Atkinson's decision.
'I thought it ruined the game. That wasn't down to a bad tackle,' said the Scot.
'I would have been disappointed if it had been a free-kick. I don't think anyone in this world thought it was [a sending off].'
Everton's chief executive Robert Elstone welcomed the overturning of Rodwell's red card but said it meant little in the wake of a defeat.
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'Whilst we welcome the correct decision the FA panel has reached, it's of course an outcome which will provide little consolation whatsoever to the 37,000 Evertonians packed into Goodison on Saturday to watch the 2-0 defeat,' he said.
'The Merseyside derby is a special occasion and many of our fans will have made financial sacrifices to make sure they were there to support the team.
'From the press, radio and television reports that surfaced in the aftermath of Saturday's events, they were almost unanimous in their verdict and we are pleased with the news that quite rightly the red card has been rescinded.'
Everton chairman Bill Kenwright added: 'One of the biggest tragedies was for Jack himself.
'He has had a terrific season and was by far and away the most influential midfielder on the pitch up to that point.
'To deny him the opportunity to continue on such an important occasion must have been incredibly difficult for Jack - as it was for his team-mates, manager and, of course, the fans.'
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Source: Daily Mail
Source: Daily Mail