The UUP's Tom Elliott brought the adjournment debate on the ex-UDR soldier, Colin Worton, on 21 June 2011.
Mr Worton spent thirty months in prison awaiting trial for the murder of Catholic man Adrian Carroll in Armagh in 1983.
The case against him collapsed after his confession was ruled inadmissible.
His co-defendants, known as the 'UDR Four', were found guilty and sentenced to life imprisonment.
Three of them later had their convictions quashed on appeal after judges found interview notes had been altered.
The fourth, Neil Latimer, was subsequently released under the Good Friday Agreement.
Those cleared received compensation under a discretionary scheme overseen by the Secretary of State, but Mr Worton has not received any such payment.
Mr Kennedy called for an apology and compensation for Mr Worton.
Speakers from the DUP and the SDLP also spoke in his support.
Justice minister David Ford assured members the matter of compensation remained open and said "the fact is clear, Colin Warton was acquitted at first instance".