The champions jockey labelled the Nicky Henderson-trained, JP McManus-owned nine-year-old as the quickest horse at hurdling he has ever ridden.
McCoy, who also won the Champion Hurdle on Make A Stand in 1997 and on Brave Inca in 2006, rode Binocular in 20 of his 22 races over timber.
He said: "He was the fastest horse to get from one side of a hurdle to the other that I've ever ridden and I think only Make A Stand could even compare to him. He deserves the happy retirement that he's now going to enjoy at Martinstown [McManus's stud in Ireland]."
Binocular was always held in the highest regard by connections, arriving at Seven Barrows in 2007 before making a winning debut as a four-year-old at Ascot in January 2008.
Two months later he ran in the Supreme Novices' Hurdle rather than the Triumph Hurdle, but Captain Cee Bee, also owned by McManus, had not read the script and beat Binocular by two lengths. The following year Binocular won twice before finishing third to Punjabi in the Champion Hurdle.
His next season caused a bit of a stir as he was very disappointing in the Fighting Fifth Hurdle and was beaten in the Christmas Hurdle but he came to life just before the Festival and won the Champion Hurdle with a devastating display by three and a half lengths from Khyber Kim.
Confirming the decision to end Binocular's career, McManus's racing manager Frank Berry said: "He has been retired - he had a little heart complaint."
Two of hurdling's new stars Nigel Twiston-Davies' The New One and the defending champion Zarkandar are among a seven-strong field for the reopened International Hurdle at Cheltenham on Saturday.
Just half a length separated the pair when Zarkandar got the upper-hand in the Aintree Hurdle last April, but Neptune winner The New One looked to have made further progress when hammering Rock On Ruby in a Listed event at Kempton in October.
Zarkandar, meanwhile, was beaten five lengths by Annie Power on his comeback at Ascot. Twiston-Davies' son Sam, jockey of The New One, said: "I'm really looking forward to it, it's not a big field but it's competitive. He's in good form and it will be nice to get him back on the course again. He was very impressive at Kempton. It was nice how he came out of the race and he's progressed from it since."
Rock On Ruby won't be there. He has been entered to make a novice chasing debut at Plumpton on Monday. The 2012 Cheltenham hero, prepared by Fry when overseeing Paul Nicholls' satellite yard, was runner-up to Hurricane Fly when defending his title but suffered a heavy loss to The New One on his seasonal comeback at Kempton.