Ted Terry, 59, was accused of calling railway customer services worker Amarjit Talafair a "f****** Paki" before headbutting him outside a City of London pub on March 22 last year.
A jury of seven men and five women took an hour and 20 minutes to find him not guilty at the Old Bailey of one count of racially-aggravated common assault after a five-day trial.
Mr Terry, of Grays, Essex, was also cleared of one count of racially-aggravated fear or provocation of violence.
Mr Terry's colleagues, former schoolboy boxing champion Stephen Niland, 36, of Romford, Essex, and Moldova-born Tudor Musteata, 47, of Greenwich, south east London, were also found not guilty of racially-aggravated fear or provocation of violence.
Outside court, Mr Terry said he was "relieved".
He said: "It's been a hard year for all of us. We all felt it was nothing, really. It was stupid."
Mr Niland was in tears as he left the dock and Mr Terry also appeared wet around the eyes as he spoke of his relief at the verdicts.
"I just feel relieved really, it's been a hard year for all of us," Mr Terry said. He added: "I'm just going home and I'm going to phone John up."
Outside the court building the defendants hugged each other and family members.