The dad-of-two, who finished fourth with teenage diving partner Tom Daley in the synchronised event at London 2012, spoke out after the Director of Public Prosecutions announced it would not be pressing charges against the player.
Port Talbot Town FC’s Daniel Thomas posted the abusive message on the social networking site Twitter after the pair failed to qualify for a medal in the event last month.
It was then distributed more widely and resulted in his arrest.
Both Pete and Tom, 18, were consulted by the DPP over their feelings about the message and said they did not want formal charges to be brought.
Pete, who lives in Millbrook , told the Daily Echo: “It was pathetic and it was childish but I did not find it offensive, firstly as I am a married father of two and secondly, because I am a bigger person than that.
“On the other hand, I can see how it could be taken extremely offensively.”
He added: “I was phoned and asked about how I felt and my view was that he shouldn’t have ever said it in the first place – but I didn’t want to see him prosecuted, a telling off was enough.”
Keir Starmer, the director of public prosecutions, yesterday said that Daniel Thomas’s message was “not so grossly offensive that criminal charges need to be brought”.
Mr Starmer said: “This was, in essence, a one-off offensive Twitter message, intended for family and friends, which made its way into the public domain.
“It was not intended to reach Mr Daley or Mr Waterfield, it was not part of a campaign, it was not intended to incite others and Mr Thomas removed it reasonably swiftly and has expressed remorse.
“Before reaching a final decision in this case, Mr Daley and Mr Waterfield were consulted by the CPS and both indicated that they did not think this case needed a prosecution.”
He added that new guidelines for prosecutors on social media cases will now also be issued, given the growing number of complaints.