Aparecida Schunck, 67, the mother of the Formula One boss wife Fabiana Flosi, 38, was abducted from her home in Sao Paulo more than a week ago.
Brazilian police said they rescued Schunck on Sunday from two men on the outskirts of Sao Paulo.
She was not harmed in the operation conducted by Sao Paulo’s anti-kidnapping division.
Elisabete Sato of Sao Paulo police told the BBC that the ransom, thought to have been the largest in Brazilian history, had not been paid.
She said there had been a major police operation to free the victim and two suspects were arrested.
Ecclestone, 85, married Flosi in 2012, three years after meeting her at the Brazilian Grand Prix.
The Brazilian magazine Veja had reported that the ransom for Flosi’s mother had been demanded in pounds sterling and divided into four bags of cash.
Brazil is hosting this year’s Olympic Games in Rio de Janeiro which start next week.
Security has emerged as the top concern, including violence possibly spilling over from Rio’s hundreds of slums.
Authorities have said they will be prepared and that some 85,000 police and soldiers will be patrolling during the competitions.