The UK-based pilot wrongly accused of training the September 11 hijackers says he will continue legal action against the Metropolitan Police and US officials.
Mr Raissi spent five months in Belmarsh Prison
Algerian-born Lotfi Raissi won undisclosed damages from the Mail on Sunday in the High Court on Monday over an article claiming he was involved in the conspiracy.
The pilot instructor spent five months in London's Belmarsh prison after the US Federal Bureau of Investigation (FBI) asked for him to be arrested shortly after the September 11 attacks.
A British court said there was no evidence to back up the US extradition request and Mr Raissi is still looking for compensation and an apology for his ordeal.
Mr Raissi, 29, told BBC Radio 4's Today programme on Tuesday he would continue with his action against the FBI, the US Department of Justice, the British Crown Prosecution Service (CPS) and the Metropolitan Police.
"We demonstrated that there is no truth in all the allegations," he said.
"It has been manipulated by the FBI from the start."
Mr Raissi has always argued the US planned to make him a scapegoat because he was a Muslim pilot.
He said the Mail on Sunday's articles made his time in Belmarsh, as his extradition was sought to the US, even more difficult
The paper claimed Mr Raissi had dishonestly used the social security number of a dead grandmother, Dorothy Hansen, to create a fake US identity.
But the article failed to make any reference to the fact that Mr Raissi had vehemently denied the allegations against him.
"The more those allegations came out, they put my life at risk in Belmarsh Prison, especially in the high tension after September 11 and especially around dangerous inmates," he told the Today programme.
His solicitor, Louis Charalambous said that it was accepted by the Mail on Sunday's owners, Associated Newspapers, that there was no evidence whatsoever to support the claims that Mr Raissi had been involved in the conspiracy.
It was also accepted that he did not steal anyone's social security number.
The newspaper's solicitor, Timothy Pinto, said it apologised for any distress caused and had agreed to pay Mr Raissi damages and his legal costs.
Mr Raissi told the BBC that truth prevailed in the end.
"What the FBI and Scotland Yard did to me is they destroyed my life and my career," he said. "My wife and my brothers, we suffered a great injustice. Where we go from now is rebuilding our lives."
He could not disclose the amount of damages awarded by the court but said the settlement was more about principles and dignity.