Football League clubs have voted to tighten the rules on loans, meaning no club can again use the system in the way Watford did last season.
The Hornets - who lost to Crystal Palace in the Championship play-off final at Wembley - had 11 players on loan from overseas clubs last season, brought in following their takeover by the Italian Pozzo family.
The Pozzos also own Spanish club Granada and Italian outfit Udinese, and Watford manager Gianfranco Zola was able to bring in numerous players from both, leading Crystal Palace boss Ian Holloway and Birmingham's Lee Clark to question the rules.
Although last season's League regulations did not put a limit on the total number of loan signings a club could make, they said only five could be included in a matchday squad and only two could be borrowed from one club in the UK.
However, loan deals arranged with overseas teams were seen as transfers, meaning there was no limit to the number of loanees that could be brought in from an overseas club and enabling Watford to include more than five in matchday squads and teams.
At a meeting in Portugal on Friday, the 72 clubs voted unanimously to change the rules, with the result being that overseas loans will now be treated in the same manner as domestic ones.
A League spokesman confirmed that the vote, which was first mooted as the Watford controversy grew last season, had been unanimous.
That means only five loan players will be allowed in matchday squads regardless of whether they have come from domestic or overseas clubs.
Holloway had been a strong critic of the loophole used by Watford. Speaking after his side had come from two goals down to draw 2-2 at Vicarage Road last season, he said he believed it was "ludicrous" that they had been able to make 11 international loan signings, six of whom were in the starting line-up.
"We're only allowed to borrow two from the same team in this country," the Palace boss said. "Unlimited abroad? That gives a licence to people to buy English clubs, chuck all their players over here and have a reserve team.
"What if Barcelona wanted to buy us and play their B team for us? We've got to sort this out."