The complaints that the ad was misleading were forwarded to the ASA by MP Jo Swinson, who also claimed that the ads were socially irresponsible.
The ad, for Olay Definity eye illuminator, claimed the product could help women acheive "younger looking eyes".
The ASA ruling said: "We considered that the post-production re-touching of this ad, specifically in the eye area, could give consumers a misleading impression of the effect the product could achieve."
The ruling came after evidence from P&G which said that it was routine practice to use post-production techniques to correct for lighting and other photographic deficiencies.
But it admitted there had been some minor retouching around Twiggy's eyes, which was inconsistent with its own policies, and had now replaced it with an ad which was not airbrushed.
However, the ASA rejected complaints that the ad was socially irresponsible because the use of post-production techniques could have a negative impact on peoples perceptions of their own body image.
It said: "We concluded that, in the context of an ad that featured a mature model likely to appeal to women of an older age group, the image was unlikely to have a negative impact on perceptions of body image among the target audience."