Kanimozhi was in tears in court and later said "I would love to thank everyone who stood by me".
The DMK leaders were among 17 accused of a 1.76 lakh crore scam; all were declared not guilty today with a Delhi judge saying the CBI had failed to provide evidence against them.
Mr Raja had been accused of using his office to hand out-of-turn cellphone network licenses in 2007-08 to telecom firms in exchange for kickbacks. Airwaves or second-generation (2G) frequency was bundled in at no cost. In 2010, the Supreme Court cancelled the allocations made by Mr Raja, who spent nearly one year in jail before getting bail in 2012.
Mr Raja, a trained lawyer, defended himself in court and cross-examined all witnesses.
Ahead of this morning's verdict, hundreds of his supporters from his constituency in Tamil Nadu gathered at the court, causing chaos and forcing a delay in the judgement.
The 2G scam, first highlighted by the national auditor in a report in 2010, was one of a series of corruption swindles that tainted the government of Dr Manmohan Singh, which was voted out after two consecutive terms in 2014.
In November this year, Prime Minister Narendra Modi visited the 93-year-old DMK chief who has been sick for several years in Chennai, and suggested he use the PM's residence in Delhi to recuperate. The visit was seen as an indicator that Mr Modi and his party, the BJP, are not averse to an alliance with the DMK in Tamil Nadu.