Injury kept him sidelined for a large part of the season but he did manage four goals, the last of which was a penalty against Peterborough in the FA Cup.
Sheringham has not yet decided whether he will go into coaching or management and has recently been playing in poker tournaments as well as watching his son Charlie play for Cambridge City.
Williams said: "It's sad when a career comes to an end but there are many players who have their's cut short by injury or don't get a contract.
"The good thing for Teddy is he's called time when he wants to and has had a fantastic career."
