Canterbury players were furious when Preston was penalised and sent to the sin bin at a crucial stage of the Bulldogs' 50-16 loss to South Sydney on Friday.
Attempting to mount a comeback at 26-12 down midway through the second half, the Bulldogs were denied possession on halfway when play was called back for Preston's contact.
The second-rower was then sent to the bin for 10 minutes after the bunker deemed his tackle dangerous, after the Canterbury man slipped off the back and onto Thompson's foot.
In the 10 minutes Preston was off the field, the Rabbitohs ran in three tries to blow out their lead to 42-12 and the game was effectively over.
On Saturday afternoon, the match review committee deemed Preston had no case to answer, with the contact judged not enough to even attract a fine.
While relieved their player will not face a ban, the lack of a charge will further frustrate a Canterbury side reeling from the news on Saturday that Josh Addo-Carr has suffered a syndesmosis injury and will miss eight weeks of football.
Bulldogs coach Cameron Ciraldo would not weigh-in to the hip-drop debate on Friday, but former Canterbury captain James Graham labelled the call a "joke" in commentary.
The decision not to further punish Preston comes after Cronulla lock Dale Finucane last week received a three-week ban for a hip-drop tackle. Last season, Brisbane prop Patrick Carrigan incurred a four-game suspension.
The NRL first issued the edict to remove the tackle from the game in 2020, fearing injuries to players when a defender swings their weight onto the back of the legs of an attacking player.
However, there have been concerns punished tackles are often merely accidents in slippery conditions.
Souths are set to be without Thompson for some time, after the winger limped off following Preston's tackle on Friday.
"The game is doing a great job trying to do what they can," Souths coach Jason Demetriou said after the match.
"It is up to the clubs to show some onus because it is going to affect your team somewhere.
"You are going to lose a high-quality player to a hip drop, which is a tackle that can be avoided in my opinion.
"We don't practise it. There is no way that would happen at training, I can't stress that point enough - it does not happen at training.
"Coaches and teammates would not let that happen, so I don't know why we are accepting that it is OK on the field."
The match review committee did charge Coen Hess, Peta Hiku, Kodi Nikorima and Brenko Lee with offences out of the Dolphins' win over North Queensland, with all four able to take fines.