Newell was sacked in October 2009, with the club citing gross misconduct. He was asking for £53,000 in damages.
"There was no genuine foundation to a whole host of the claims that had been made," said Mariners chairman John Fenty.
"The club were content to have the whole issue heard in court to clear up things, in particular, that had been said about the chairman. Throughout the reducing settlement proposals the claimant Mike Newell was making, the club maintained it's position, that it was at fault for one thing, in terms of employment laws, procedurally speaking the club should have taken time to investigate the issue.
"While [Newell] acknowledged that there had been a bit of a dispute after the Rochdale game, to be faced with a high court claim for £53,000 and a raft of accusations was very hurtful and upsetting. It was not good timing for me and it was not good timing for the football club.
"It was resolved around four weeks ago. It was settled out of court and over time, starting with the £53,000 claim, there was an attempt to negotiate a sensible way out. Nobody wants to go to the High Court and incur the costs - whether they are right or wrong."