This rule meant that Hoy was unable to defend his men's sprint title as Jason Kenny was selected for the event - he did go on to win the gold.
Cycling is the only sport where this rule applies and Hoy believe that some great racers have missed out on a chance to ride at the Olympics.
Speaking to the Belfast Telegraph Hoy said: "We knew there was only one rider per nation. It was disappointing not just for us but also for the other nations and for the fans.
"I think they missed out on a number of top-class competitors in a number of the events.
"Can you imagine a 100m final with only one Jamaican or American runner? Anyway, it happened and we dealt with it and I think we dealt with it well."
And while Hoy may not have been able to defend his sprint title he enjoyed another successful Olympic as he won two gold medals in the velodrome.
Hoy won his first gold in the team sprint before winning his sixth gold medal in the kierin.
With that sixth gold medal be become Great Britain's most successful Olympian as he surpassed Steve Redgrave's gold medal haul of five.
It is unlikely that Hoy will compete in Rio in four years time but it is believed that he will be at the Commonwealth Games in Glasgow in two years before he retires.
FemaleFirst Helen Earnshaw