Fiery Ramsay, famous for his use of on-air expletives, was involved in a shoving match with the 16-stone man, who fell over and damaged his ankle.
The contestant could have sued for over 拢3m in the US courts, lawyers had predicted.
The scuffle occurred in October during filming of the US version of 'Hell's Kitchen' in Los Angeles, as part of a 拢1m deal with Rupert Murdoch's Fox TV.
Unlike the UK version of the programme, the US contestants are not minor celebrities, but instead members of the public who want to make it as chefs. The winner will receive their own Hollywood restaurant worth more than $2m. The show is to be screened in the UK on ITV1 later this year.
Bosses at Granada and Fox TV are reportedly furious with Ramsay over the incident in Los Angeles.
Ramsay, who is behind restaurants such as Gordon Ramsay at Claridge's, has carved himself a media reputation as a foul-mouthed, bad-tempered yet very watchable TV star in shows such as Channel 4's 'Ramsay's Kitchen Nightmares' and ITV1's 'Hell's Kitchen'.
One of the classic one-liners from the fiery chef included a stern dressing down for contestant Edwina Currie.
"One minute you're shagging our Prime Minister and now you're shagging me from behind," he told her.
He also verbally attacked rival chef Antony Worall Thompson and model Sophie Anderton, who he called a "two-faced bitch".
In his Channel 4 show, 'Ramsay's Kitchen Nightmares', he invited another chef to "step outside" after a fight about a Caesar salad.
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