Telfer, who was signed by ex-Leeds boss Gary McAllister and made 18 appearances during the first half of this term, found himself on the fringes of United's plans after Simon Grayson's appointment in December, and the pair agreed that a parting of ways would be sensible before the January transfer window closed at 5pm on Monday.
Telfer says in the YEP: "The club have got far too many players on their books and it's something Simon's trying to address. It's not always a healthy situation when you've got big groups of guys who are training with a club but aren't going to play, and I thought it was best if I helped him with that.
"I wasn't in the team and I accepted that because the defence improved under him with other players in it, so I went to see him and said that I thought it would be better for him if I wasn't hanging around the place.
"He assured me that I wasn't in the way or causing a nuisance but he was very honest about the fact that I might not get a game there.
"It was all very amicable and we decided it was best to go our separate ways. I think it was important for Leeds that I took that decision."