La Roja lost 3-0 to Group winners Brazil in their final qualifying game, slipping out of the automatic places and play-off position into sixth, ending the country's chances of making the major tournament in Russia next year.
The Bayern Munich midfielder, who made his international debut back in 2007, was part of the golden generation of Chile players that claimed the Copa America in 2015 and 2016.
Vidal, 30, says he has had his "soul crushed" after failing to make the World Cup and he will now be focusing his remaining years as a professional footballer on the domestic stage.
"Thank you lads, for everything, for all these years together... for teaching me and for showing a country that with effort and work anything is possible in life," he wrote in Spanish on Twitter.
Chile's failure to reach the World Cup has also brought about the resignation of manager Juan Antonio Pizzi.