"I held Zidane's shirt briefly then he looked at me and said 'If you want the shirt, you can have it after the game'. So, I replied with an insult," Materazzi told Gazzetta Dello Sport on Tuesday.
"I didn't call him a terrorist because I don't even know what that means and I didn't insult his mother either.
"It was an insult that you can hear tens of times everyday and which is not that serious."
Zidane was shown a straight red card after he was spotted by the fourth referee hitting his Italian marker.
Television replays showed a verbal spat between the duo before the often-cool Zidane head-butted materazzi and left him sprawling on the grass in pain.
The incident was a center of heated debate since Sunday night and question marks have been mounting over the reason that forced Zidane to assault Materazzi with ten minutes remaining in extra time.
An anti-racism organization said, quoting anonymous sources, that Materazzi called Zidane, who is the son of Algerian immigrants, a 'dirty terrorist'.
Experts in reading lips hired by a Brazilian television network offered another interpretation when they said the Inter Milan man called Zidane's sister a 'prostitute'.
No comment has been issued by Zidane who reportedly refused to talk about the incident in the dressing room after France lost the final 5-3 on penalties.
Zidane's agent Alain Migliaccio told BBC Sport that he knew that his client was provoked by Materazzi.
"He told me that Materazzi said something very serious to him but he wouldn't tell me what," he said.
But Migliaccio revealed that Zidane will talk about the incident in full details later this week.