Prosecutors said during Chief Warrant Officer Lewis Welshofer Jr's court-martial that his interrogation of Major-General Abed Hamed Mowhoush "could fairly be described as torture" and had stained the military's reputation.
During the trial, testimony showed he stuffed Mowhoush in a sleeping bag and straddled his chest.
Eugene Fidell, president of the National Institute of Military Justice, said if the tables were turned and an American general had fallen into enemy hands and suffered the same fate from interrogators, there would have been an uproar in the US. "How is this going to look overseas?" he said.
Mowhoush, the former commander of Saddam Hussein's air defences, surrendered to the Army on 10 November 2003, in hopes of seeing or securing the release of his four sons.
Sixteen days later, Mowhoush died after Welshofer covered him in a sleeping bag, straddled his chest and put his hand over the general's mouth, already covered by the bag.
Initially charged with murder, assault and wilful dereliction of duty at his court-martial at Fort Carson, Welshofer was found guilty of negligent homicide and negligent dereliction of duty.
On Monday, a military jury ordered a reprimand and forfeiture of $6000 in pay, and restricted him to his home, office and church for two months.
Observers said Welshofer's sentence is lenient and his case and others like it could endanger Americans whose captors might use them to justify inhumane treatment.
In May 2005, Lieutenant Andrew Ledford, a Navy SEAL who had faced up to 11 years in prison for allegedly beating an Iraqi prisoner who later died, was acquitted of assault, dereliction of duty, conduct unbecoming an officer and making false statements.
In September, Army Pfc Lynndie England, who posed for some of the most infamous photos depicting detainee abuse at Abu Ghraib prison in Iraq, was sentenced to three years in prison in the last of nine courts-martial of low-level soldiers charged in the scandal.
Lynndie England was jailed three
years for detainee abuse
Pvt Charles Graner Jr was sentenced to 10 years in the same case, while six soldiers struck plea bargains.
Last month, five army Rangers pleaded guilty in cases concerning detainee abuse in Iraq and received sentences ranging from 30-day to six-month confinements and reduction in rank. Those soldiers were not identified.
"The biggest news of this verdict is, it's not news," Jumana Musa, advocacy director of Amnesty International, said of the Welshofer sentencing.
"It really follows the lines of other such cases: very little punishment for what would otherwise be thought of as very serious crimes."
Musa said such cases erode US credibility at a time when it is urging other countries to increase human-rights protections. She said they could also set human rights progress back by giving countries such as Libya an excuse to justify abuses.