The 28-year-old was dismissed after conceding a penalty at Stamford Bridge, with Spurs crashing to a 4-0 defeat.
Eden Hazard converted the spot-kick to put the Blues 2-0 ahead at the time and, if Kaboul's red card had stood, Spurs boss Tim Sherwood would have been limited in terms of defensive options when Arsenal visit White Hart Lane.
Knee and ankle injuries have limited Kaboul to 11 appearances so far this season, with his start at Chelsea only his second since the 6-0 thrashing at Manchester City in November.
Spurs skipper Michael Dawson was forced off at Stamford Bridge and, with fellow centre-back Vlad Chiriches still nursing a back problem, Sherwood would have been down to Jan Vertonghen for the Arsenal clash if Kaboul's three-match ban had stood.
Spurs go into the game on Sunday six points behind their local rivals and four points off the Barclays Premier League top four.
Question marks remain over the long-term future of Sherwood, who replaced Andre Villas-Boas in December, and he faces a crucial week if he is to keep his job beyond the end of the season.
As well as the pressure of a north London derby, Tottenham host Benfica in the opening leg of their Europa League tie as Sherwood looks to guide his side into the quarter-finals while maintaining a domestic push to qualify for the Champions League.
Announcing the decision regarding Kaboul, the FA said in a statement on its website: "Following an independent regulatory commission hearing today, a claim of wrongful dismissal concerning Tottenham Hotspur's Younes Kaboul was upheld.
"Kaboul was dismissed for denying an obvious goal-scoring opportunity during the game against Chelsea on 8 March 2014.
"The player's one-match suspension has therefore been withdrawn with immediate effect."