Orrell, 21, joined the Moors in July from National League side Hartlepool United, but struggled to make an impact at The Brewery Field.
The winger joined Ebac Northern League side Morpeth Town on a one-month loan deal at the end of September in a bid to get minutes under his belt.
He leaves having made two starts and seven substitute appearances.
Manager Jason Ainsley has released the following statement: “It’s been a difficult start of the season for Jake. We got off to a very good start and it’s been hard for him to force his way back into the squad due to that. We have seen his ability during training and he is a fantastic lad who I’m sure will do well at his next club.
“He went on loan to Morpeth for a month and this was for him to get some game-time. Unfortunately, it didn’t work out for Jake, and it was beneficial for both parties to cancel his contract with us. He needs to get games and we wish him all the best.
“Everyone at Spennymoor Town FC wishes Jake the very best in his future career and thanks him for his contribution to the club”.