Flintoff labelled his skipper's interview with the Guardian this week "a storm in a teacup".
Vaughan was quoted as saying: "You have to be honest: the 'Fredalo' incident did affect the team. It did affect morale," referring to Flintoff being found on a pedalo, or paddleboat, at 4am in the morning after England's opening group match defeat against New Zealand in St Lucia.
Flintoff was one of six players disciplined for late night drinking during the tournament.
England skipper Vaughan subsequently denied saying "Fredalo" only for the Guardian to publish an audio tape of him using the word.
All-rounder Flintoff, who was stripped of the vice-captaincy following the incident, met with Vaughan on Wednesday to clear the air.
"We sat down and spoke about a few things and, as far as we're concerned, it's finished," Flintoff told Sky Sports in an interview at Old Trafford here Thursday. "We've got a great friendship and something like this, a bit of a storm in a teacup, isn't going to affect that."
Flintoff is currently out of the England side having undergone a third bout of surgery in as many years on his troublesome left ankle last week.
The 29-year-old, who plays his county cricket for Old Trafford-based Lancashire was on hand to see Vaughan receive a mixed reception from Flintoff's home crowd while scoring 41 on the first day of the third Test against West Indies.
However, Flintoff said: "I'm looking forward to getting back on the field, playing under him (Vaughan), as quick as I can."
Lancashire chief executive Jim Cumbes branded Vaughan's comments 'despicable' on Tuesday but Flintoff, who shares an agent with the England captain, said he and Vaughan had now sorted everthing out.
"I've spoken to him, we've cleared it all up and we'll take it forward from here. From my point of view, it's something that happened a while ago.
"The one thing I'm concentrating on at the moment is not what happened six to eight weeks ago, it's getting back on the field.
"I've just had an operation on my ankle, I've got a rehab programme in front of me. All my focus and all my energy has got to go into that because I desperately want to get out on the cricket field."
The hard-hitting batsman and fast bowler said: "The way I play and the way I bowl, I've got to be 100 percent fit. I want to get back to bowling late 80-90mph and to do that I need a fit ankle."
Flintoff's ability to bowl at top pace in international cricket has now been questioned but he said: "I have had ankle operations in the past and come back from them and hopefully I can do again.
"It's frustrating I'm not playing but I'm confident I can and I have the utmost faith in the medical staff."