Kyle, 33 - who signed a one-year deal with the Gers in August 2012, but left by mutual consent in March 2013 after just eight appearances - told the BBC Sportsound programme that some of his team-mates during the 2012-13 season were earning more than £400,000 a year, while the club was in the bottom tier of Scottish football.
He said: “The majority of players who are there at Rangers are there for one reason and one reason only. And that’s the money that was on offer to them.”
The club’s playing budget has been drastically reduced in the two seasons since Rangers played in what was then the Scottish Third Division after a raft of financial difficulties.
And in recent weeks, manager Ally McCoist has handed in his notice and Newcastle owner Mike Ashley has given the club £3 million over two loans.
The club and Ashley were this week issued with notices of complaint from the Scottish FA.
But Kyle believes the de-motivating effect of the high wages he experienced is still a problem at Rangers.
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He added: “I look back and I regret going to Rangers as maybe it was the downfall of my career.
“I spent six months with Rangers and, within a year of moving to Ayr, I decided to chuck it in as I just lost all interest in it. I’m sure there are a few guys there who are fed up.”
Kyle told the programme that he thought the quality of opponents outside the top flight would have dragged the Rangers players down a level.
“My memory of Rangers is playing in front of 50,000 fans against the big teams, but this time around it is playing for Glasgow Rangers at Stirling Albion in front of a few hundred people,” the former Hearts striker said.
“For me, it was a great thing playing for Rangers, but what we were playing against every week never got me going. It didn’t have that same vibe.”
The ex-Scotland international, who endured a lengthy injury lay-off during his time at Ibrox, told of meeting with Ally McCoist to discuss a new deal.
“I sat down with the manager and he asked what I was looking for and I just said a crazy figure and I almost got what I wanted.” Kyle recalled.
“Looking back now, maybe he would want to do things differently. Over the course of a year, it was something about £100,000 with various bonuses.”
And Kyle revealed some of his team-mates had been on nearly four times that.
“I know some of the figures some of the guys were getting and it was just stupid - it was laughable at times,” he said.
“A few of the guys I used to play with, you’re talking about £300,000 to £400,000 per year playing in the Third Division of Scottish football with money rising depending on appearances and bonuses.”
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