The former Senegalese international joined the club on loan in 2011 from Blackburn Rovers.
Diouf played 22 times, scoring twice, as he helped Rangers pip Celtic to the SPL title and defeat their city rivals to win the League Cup.
A controversial character throughout his career, he had history with the Parkhead club prior to pitching up at Ibrox.
In 2003 he was handed a two-match ban and fined two weeks’ wages by Liverpool after spitting at a Celtic fan during a Uefa Cup match.
Then, in his short period in Scottish football, he was involved in an on-field spat with Scott Brown and he was sent off in the infamous Scottish Cup replay between the Old Firm.
Thompson, a coach at Celtic at the time of that fixture, revealed Diouf was “dishing out verbals” to opposition players as well as Neil Lennon.
He told the Scottish Sun: "Don't forget it was Lenny and me opposing him exactly eight years previously when Celtic played against Liverpool in the Uefa Cup match at Parkhead and he infamously spat at Celtic fans.
"You look at Diouf and he was pretty decent. The guy had been with some good clubs but in my opinion the only reason Rangers brought him in on loan was to wind the Celtic fans up.
"He was brought in by Rangers for the shock value."