The 33-year-old decided to call time on his career after sustaining injuries in his past two years with the club, which limited his time on the field.
"I've accomplished everything I could possibly dream of as a football player," Diehl said in a statement.
"If in 2003, anyone would have said that Dave Diehl, a fifth-round Draft pick out of Illinois, would win two Super Bowls, play in the Pro Bowl and win every single Giant award possible, people would have said you're crazy. I have a lot to be proud of."
Diehl won Super Bowl 42 and 46 with the Giants and was also voted as an All-Pro in 2008.