Iraq beat their fierce rivals 7-6 on penalties in the last-eight contest after the match finished 3-3 following extra time in Canberra.
However, Iran launched an appeal with the Asian Football Confederation (AFC), claiming that Iraqi midfielder Alaa Abdul Zahrah Khashen Al-Azzawi was ineligible for selection.
An AFC Disciplinary Committee subsequently decided that the evidence put forward by Iranian officials was unfounded.
"The AFC Disciplinary Committee met on 25 January 2015 following a protest lodged by [the] Iran Football Federation on 23 January 2015 regarding the eligibility of Iraqi player, Alaa Abdul Zahrah Khashen Al-Azzawi, to participate in the quarter-final match between Iran and Iraq on 23 January 2015," read a statement posted on the official website of the Australian national football team.
"The AFC Disciplinary Committee heard oral evidence from two officials of the Iran Football Federation, deliberated the matter based on its merits, and decided that the protest was unfounded.
"The protest was therefore dismissed.
"The Iran Football Federation will have the right to file an appeal in accordance with the AFC Disciplinary Code."
Iraq's semi-final clash with South Korea is due to take place on Monday at Sydney's ANZ Stadium.
