Nomvuho Mzamane had claimed Winfrey defamed her in remarks in 2007, in the wake of a scandal over alleged sex abuse at the school.
Ms Mzamane said she later had trouble finding a job.
On Tuesday, lawyers for both parties said they had met "woman to woman" and resolved their differences.
In a statement they said the two parties "are happy that they could resolve this dispute peacefully to their mutual satisfaction," without disclosing details of the settlement, the Associated Press news agency reports.
Winfrey had been expected to testify next week at a trial in Philadelphia.
The school was opened in Johannesburg in 2007 at a cost of $40m (£26.3m).
Winfrey pledged to build the academy after a meeting with former South African President Nelson Mandela in 2002, and personally interviewed many of the South African girls from low-income families who applied for the initial 150 places at the school.
The US talk-show host has said she was herself abused as a child and has campaigned against abuse in the US.
She described the complaints at her school as one of the most devastating experiences of her life.
Source: BBC
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