The pair held talks on Monday after Carew's initial outburst against Houllier via an interview in his native Norway on Saturday prompted an angry response.
Villa issued a statement on Monday night which said "the matter has been dealt with internally and is now resolved".
Carew had accused Houllier of being disrespectful after being challenged to prove he deserved a new contract.
Houllier responded after the 1-1 draw at Fulham by saying Carew was "stupid" and urged him to stop "living in the past".
Now the pair, publicly at least, look to have drawn a line under the affair.
Carew is already sidelined for a month with a torn calf muscle suffered in training ahead of the trip to Craven Cottage. He is out of contract next summer and it remains to be seen whether he has a long term future at Villa.
Carew had previously played under Houllier at Lyon before moving to Villa in January 2007 in a swap deal with Milan Baros.
He has been Villa's leading scorer for the past three seasons and was on target 17 times during the 2009-2010 campaign, but Carew has failed to find the net in eight appearances this season, looked a shadow of his former self, and also had to contend with an early season back problem.
Carew's injury left Houllier without a single senior striker for the clash with the Cottagers with Emile Heskey (knee) and Gabriel Agbonlahor (groin) also injured.