Boss Bailey played six games for Denver before a left knee injury ended his season in a game at New England on Oct. 20.
He was placed on injured reserve and later underwent microfracture surgery.
Boss Bailey's agent, Jack Reale, said his client, who previously spent five seasons in Detroit, will ponder his next move once the knee is fully healed.
"Obviously, as a professional athlete, no one ever likes being released," Reale said. "But he's a veteran and a quality guy and understands the team has to make certain decisions based on what's best for the team. He was appreciative of the opportunity."