Horsfield made 12 appearances on loan for the Iron in 2008, but will be best remembered for his spells at Fulham, Birmingham, Wigan and West Brom.
The 38-year-old said he is planning to pursue business interests away from the game.
"At this stage of my life I feel it is time for a change. I have enjoyed my time here and it will be the first result I look out for," he told Port Vale's official website.
"I will always keep in contact with a lot of people here because it is a fantastic club.
"I know coming out of football I am not going to get another opportunity in it, but it's something I feel I have got to do."