The pensioner was caught in the act on Monday morning by a member of staff in the pony's stable at a horse-riding centre in the town of Thiais, about 10 km south of Paris.
"He was caught by surprise in the pony's box, clearly in the middle full sexual act with the animal," Le Parisen newspaper wrote.
The staff member then alerted the police who arrested the man later that morning. On Tuesday police interviewed the witness, but she was unable to be absolutely sure that intercourse took place.
However on Thursday police released the pensioner due to insufficient evidence against him.
According to a psychiatrist, the man did not appear to be suffering from any disorder.
A judicial source told Le Parisien that the case would now most likely be closed.
Bestiality has been illegal in France since 2004. The crime carries a maximum prison sentence of two years and a €30,000 fine.
Sex acts on animals were only officially banned in Denmark in April this year, bringing the country's bestiality laws in line with its neighbours.