The 33-year-old made the decision based on the fact that he will not be around for the next World Cup in four years' time, with Johnson quick to praise the impact his former Leicester team-mate has had on the international stage.
"Lewis has been a great servant to English rugby and has literally put his body on the line more times than he can probably remember," said Johnson.
"To play in two World Cup finals, then lead his country in a third campaign is a great testament to him.
"He will be missed on and off the field and, on behalf of everyone in the England squad - players, coaches and management - we wish him all the best for the rest of his career."
A World Cup winner in 2003, Moody won the lineout that led to Jonny Wilkinson's famous last-gasp drop goal in Sydney as England claimed the game's greatest global prize.
He toured with the Lions in 2005, winning two Test caps to add to the 71 he collected for England.
But while the energy and enthusiasm he brought to the role of England captain could have seen him carrying on for the foreseeable future, Moody believes now is the right time to step aside if England want to make up for their recent World Cup disappointment in 2015.
"It's a big decision to make. I feel emotional about making it but it's the right thing to do for me and for the England rugby squad," added Moody.
"I realised I might be making this decision before the World Cup started. Even if they still wanted me to carry on, there's no way I would last another four years.
"My time with England has been unbelievable, even if the last few weeks have not gone so well.
"It's only right for the team to move on. There will be changes, maybe in management and definitely in some of the match-day 22.
"If England want to start planning for a successful World Cup in four years time, it is my belief they should be appointing a new captain from February."