Mr Teeley, who works for a laundry firm, was kidnapped in the city of Nasiriya.
He called his family to tell them he was safe. He also wanted to know how his football team, West Ham, had been getting on.
The fighting in Falluja started after four US civilians were killed in the town last week.
It sparked off several days of intense fighting.
Over the weekend, the two sides agreed to put down their guns so talks could be held to try to sort out the problem.