The Specsavers print ad, which also appeared on the optician's Twitter and Facebook pages, showed a picture of Pietersen alongside the wording, "‘Bat tampering’ in the Ashes? Apparently Hot Spot should’ve gone to Specsavers".
Pietersen had been accused by an Australian television channel of using silicone tape during the series to prevent the Hot Spot decision-review technology from detecting when he had hit the ball, but he denied the allegations.
Duncan Lamont, head of media and entertainment at legal firm Charles Russell, warned: "Advertisers must be careful when dealing with issues such as these and be aware that the law does not allow the belief that ‘it was a joke’ as a defence."
During a High Court hearing on 8 October, Specsavers accepted that Pietersen had not tried to deceive umpires.
The company, which had already removed the ad from circulation, apologised and agreed to pay him substantial damages and his legal costs.
In a statement, Specsavers said: "We apologise unreservedly for any distress and embarrassment our advert has caused to Kevin Pietersen."
Lamont added: "In libel law intention is irrelevant. The responsibility of proving the truth of allegations such as breaking sporting rules must be able to be proven by a publisher before an advert is issued so as to ensure that the integrity of a sportsperson is not brought into question.
"Courts and comedy just don’t mix."
Pietersen has since tweeted that the damages will be given to cancer-related charity JCE Trust.
And just so you know.. All the damages I've received from Specsavers will be going to the @JCEtrust ..— Kevin Pietersen (@KP24) October 8, 2013