The body of Jonathan Macari, 19, was discovered by a passer-by hanging from a tree in the Trentham area of Stoke-on-Trent early on Wednesday.
A post-mortem examination has been carried out, but Staffordshire Police said the death was not being treated as suspicious.
The teenager, who was unemployed at the time of his death, had initially followed his father into football as a "promising" centre-forward.
He joined Nottingham Forest on a two-year Youth Training Scheme in 1997 but was released last May, a year before his apprenticeship was due to be completed.
Jonathan's former manager Dave Bassett said on Thursday: "The lad was a great player with decent potential, but he just seemed to stagnate and lose interest.
"We sat down with his dad and tried to convince him he had a future, but he didn't want to know. He was a nice lad. This is a great tragedy."
'Tremendous potential'
Nottingham Forest's current manager Ron Atkinson has sent his condolences to his close friend Lou Macari.
Mr Atkinson said: "It's a tragic incident. My sympathy goes out to the family. I didn't actually know the lad, he was already released when I took over, but I feel for the family.
"I know Lou particularly well from our days together at Manchester Utd. These must be trying times for him."
The headteacher at Jonathan's old school also expressed shock and sadness.
Dr Roger Burgess said the teenager was remembered as a boy who displayed "tremendous potential and spirit".
"Our heartfelt sympathy goes out to the family, who had forged close ties with the school during Lou's time with Stoke City," he said.
Lou Macari's own playing career was launched with Scottish side Celtic in 1966.
He joined Manchester Utd in 1973, collecting an FA Cup winners' medal four years later. He is currently assistant manager with Sheffield Utd.
Northern Ireland
Scotland
Wales
England
Blades fill vacancies
(09 Mar 98 | Football)
Macari loses legal battle against Celtic
(19 Feb 98 | Football)
Nottingham Forest
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Sheffield Utd
Staffordshire Police
Stoke City
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