The plaintiffs alleged that the defendants conspired to commit libel, generate publicity for themselves by placing the plaintiffs in a false light and intentionally inflicted emotional distress.
But U.S. District Judge Ronald White rejected those claims in his ruling Wednesday in the U.S. District Court for the Eastern District of Oklahoma.
The two men initially convicted in the slaying - Ron Williamson and Dennis Fritz - were later cleared by DNA evidence and freed after 12 years in prison.
A key witness for the prosecution, Glen Gore, was later linked to the crime by DNA, found guilty of the murder and sentenced to life in prison.
In his ruling, the judge wrote that it was important to be able to analyze and criticize the judicial system "so that past mistakes do not become future ones."
"The wrongful convictions of Ron Williamson and Dennis Fritz must be discussed openly and with great vigor," White wrote.
The lawsuit named Grisham - whose account was titled "The Innocent Man" - his publishing company and the authors and publishing companies of two other books critical of Peterson and his prosecution of murder cases. Also named as a defendant was Barry Scheck, founder of the New York-based Innocence Project and an attorney for one of the men falsely accused in the murder.
"This is a victory for free speech and for holding officials publicly accountable for their role in wrongful convictions," Scheck said in statement.
Gary Richardson, the attorney for Peterson, Rogers and Hett, said he was still reading the judge's order to determine whether he would file an appeal.
"Of course, I'm quite disappointed and a bit surprised at the ruling," Richardson said. "I felt that we had a solid case for defamation."
A message left Wednesday with Grisham's publishing company was not immediately returned.