The law had been forgotten about until researcher Alan Barclay found it in the club's archives. Members unanimously backed a motion to abolish the rule last week, The Sun reported.
Barclays, 66, said: "Germans and Austrians have played here but not 'legally' - until now. Now they are officially welcome."
"I was absolutely astounded. I thought 'my goodness'. I was just as amazed really to find that nobody ever came up and said 'we have got to rescind that'. It just sat there for 88 years.
"There could have been some naturalised people who were affected, but there is no way of knowing whether that happened.
"It's not the kind of law you want a modern club to have.
"We're now good friends with the Germans - apart from when they beat us at football, obviously."