In September 1992, Elliott sustained a serious knee injury, resulting from a challenge by Liverpool'sDean Saunders. He never played again and on 10 May 1994 – just four days before Chelsea lost to Manchester United in their first FA Cup final since 1970 – Elliott announced his retirement after failing to recover from the injury. Player and club had been confident of a return to action in 1993–94 and he had been issued with the number 22 shirt with the introduction of squad numbers in the FA Premier League.
Just after his retirement, Elliott filed a lawsuit against Saunders seeking damages for the career-ending injury. However, he lost the case when a civil court found that Saunders was not at fault. Elliott was often a pundit on Football Italia.
Elliott resigned from his roles with The FA, as a member of the Association's Judicial Panel and as a nominated member of UEFA committees on 23 February 2013. He also left his role at Kick It Out. The FA accepted his resignation following a reported text conversation in which "discriminatory abusive comments" were made to fellow former footballer Richard Rufus. On 15 July 2014, Elliott rejoined the Inclusion Advisory Board.