Tiffany Foster's horse Victor was found to have hypersensitivity in his left front leg due to a small scratch shortly before Sunday's team competition.
While Canadian officials have argued Victor was fit to compete, FEI secretary general Ingmar De Vos said he believes disqualification was the right decision.
"Disqualification of an athlete will always spark speculation, but in the case of Tiffany Foster's horse Victor the protocol established very clearly that this was an obvious case of hypersensitivity," De Vos said in a statement Thursday.
"This was a unanimous decision, supported by four highly qualified veterinarians who specialise in testing for hypersensitivity using a system that has been monitoring FEI competitions since 2005."
Canada's appeal of the decision was denied and a devastated Foster was knocked out of the London Games, enraging her teammates.
Canada went on to finish fifth in team jumping.
Equine Canada has called for a review of the hypersensitivity protocol.
The issue of hypersensitivity has followed international show jumping for years, since capsaicin — the main ingredient in chili peppers — can be used to make a horse's legs over-reactive to touch and thus jump higher. Several jumping horses were disqualified at the 2008 Olympics for testing positive to capsaicin.
However, jumpers in competition can easily get small leg cuts, and the tests for hypersensitivity don't distinguish between heat in a leg caused by a minor sore or by a foreign substance.