The Werder Bremen player was suspended after the FIFA Disciplinary Committee viewed TV pictures which showed him hitting Argentina’s Julio Cruz in the face during the melee which occurred after their quarter final.
The 29 year old received a two match ban, but with one match suspended, meaning he is eligible for the final should his team progress.
Olivier Bierhoff, German team manager, expressed his side’s disappointment with the decision.
"We are disappointed. We believed that we had presented a sufficient explanation for him to be cleared," he said.
Bierhoff argued that the TV pictures showed that the referee Lubos Michel and the two assistant referees were standing next to Frings at the time of the incident but had not given him any punishment at the time.
"It now seems that we no alternative other than to accept the decision," he added.
Markus Siegler, FIFA’s head of communications, denied that the Italian football federation had played any role in bringing the pictures to their attention.
"There was no attempt from the Italian federation to incite FIFA to do something,” he said.
"This footage was shown on a public channel in Germany."
Frings had earlier protested his innocence when speaking to a German newspaper.
"I did nothing," he told a German regional newspaper.
"I found myself mixed up in a melee where fists were raining down everywhere.
"I myself was hit twice. It was at that point I protected myself, and put my hand in front of me, but I did nothing else."
The alleged victim Cruz also spoke to the Italian media in his defence.
"I did not see the punch from him, or else I did not feel it," said the Inter Milan striker.
Fring’s place is likely to be taken by Borussia Dortmund’s defensive midfielder Sebastian Kehl.