Carter, who is still contracted to the Kolebco Steelers in Japan, signed for Racing 92 on a medical joker deal in mid-February as a replacement for South African first-five Pat Lambie, who was forced to retire due to concussions.
According to reports, the short-term contract was set to earn the former All Blacks playmaker between €25,000 (NZ$41,847) and €35,000 (NZ$58,587) a month.
However, Racing 92 confirmed earlier this month that Carter, 37, would not be joining the club he played for from 2015-18 because of a "cervical spine problem".
Carter, a World Cup winner in 2011 and 2015, told the New Zealand Herald he has been struggling with a "disc bulge" in his neck and the injury might require surgery.
"I would have loved to have gone back to Racing and to have given Europe another crack but I wasn't cleared to play, so it wasn't to be," he told the New Zealand Herald.
"I wasn't cleared to play, so it's a blessing in disguise because I get to spend more time back here in New Zealand.
"I don't have a lot of rugby in me but I'm still loving it and enjoying it, so I guess this long break has helped me to phase into life after rugby."
Carter said the neck problem was one he's been managing for a few years and he was consulting specialists.
The former Crusaders and Canterbury No 10 joined Racing 92 on a three-year deal after retiring from international duty after playing a starring role in the All Blacks' 2015 World Cup triumph.
He was instrumental in guiding them to the French Top 14 title and the final of the European Champions Cup in his first season, but he struggled with injuries and form in his last two years in Paris.
Carter, who recently visited Christchurch's destroyed Lancaster Park for one final time, is set to return for a second season with the Kolebco Steelers after guiding them to the title in Japan last year and he was the competition's most valuable player.
"The beauty is that my second year in Japan doesn't start until after the World Cup," he told the New Zealand Herald.
"The Top League season there has been pushed back because of the World Cup, so I will have plenty of time to spend with my family. I thought I would get my body ready for my second season in Japan."
With the World Cup in mind, with the tournament starting in Japan later this year, Carter is backing the All Blacks to win a third successive title.
"The beauty is that the rugby landscape has changed over the last few years. Now there is so much competition and we have seen the threats from the Irish, the Welsh, and the English and we all know South Africa and Australia will be good come World Cup time.
"So it's not as one-sided as we all thought it was a couple of years ago, and that's exactly how we want it."