The regulator said that the dance by Lorna Bliss, who had previously auditioned for Britain's Got Talent, was "saucy" rather than "overtly erotic or sexualised", The Guardian reports.
Bliss's performance of Spears's 'Till The World Ends' prompted 35 complaints to Ofcom from viewers.
However, the regulator also moved to "remind ITV to ensure that careful consideration is given to the use of such images" before the 9pm watershed.
The scenes looked at by Ofcom included Bliss straddling show judge Louis Walsh, a shot moving up her body and a "brief, mid-shot image of the performer's partially obscured buttocks as she bent over to camera before her audition began".
After the original broadcast, an ITV spokeswoman said: "Lorna's performance and its editing was carefully considered by the producers and ITV.
"We do not believe her routine exceeded generally accepted standards or the expectations of the vast majority of the audience."
After being cleared by the regulator, ITV said that it regretted any offence caused, noting that not all parents would have felt that Bliss's audition was inappropriate for pre-watershed viewing.
Bliss's Britain's Got Talent audition was rumoured to be axed from the show for being "too risky" but it did in fact air on the programme.
Her later inclusion in the top 40 angered some fans as she received three buzzes and three no votes from the judges. She was eliminated at the semi-final stage.
Bliss, who has also appeared on TV shows in Japan, Australia and Italy, reprised her Britney routine on The X Factor, which included Gary Barlow fleeing her advances.
The X Factor was investigated by Ofcom in 2010 after performances from established stars Christina Aguilera and Rihanna prompted complaints.
The regulator found that the performances were "at the very margin of acceptability for broadcast" but not in breach of its guidelines.
It also noted that "approximately 2,000" complaints had been received after the Daily Mail coverage of the performances, which featured still images "significantly more graphic and close-up" than the material that had been broadcast on the programme, and that were "taken from a different angle to the television cameras".