Margaret Thomas from Pontnewynydd, Pontypool, died six hours after community nurse Joanne Evans's injection, the Cardiff inquest heard.
Ms Evans injected 10 times too much insulin using the wrong syringe. Coroner Mary Hassell ruled that Mrs Thomas was unlawfully killed.
The Crown Prosecution Service (CPS) said it would look again at the case.
Gwent Healthcare NHS Trust, for which Ms Evans - a newly-qualified nurse - had been working at the time, said it had held its own investigation into the death and changes had since been made in procedures.
A spokeswoman for the trust added that Ms Evans was not currently working as she has been involved in a disciplinary process which has now been referred to the Nursing and Midwifery Council.
The CPS had concluded the case was a "tragic mistake" but, following the verdict, said it would "review its decision as a matter of course".
A spokesman said: "The Crown Prosecution Service considered this case very carefully indeed and concluded that a tragic mistake had occurred.
"However, on reviewing the available facts, the CPS decided that there was insufficient evidence to offer a realistic prospect of conviction for gross negligence manslaughter."
Recording her verdict, the coroner said Ms Evans had breached her duty of care to Mrs Thomas by not taking all reasonable precautions to prevent risk of her dying.
She said nurses were told in their basic training to always use an insulin syringe when injecting the substance because it was measured in units, not millilitres.
She said that despite this, Ms Evans did not seek to get the correct syringe from a colleague or the local hospital.
Ms Hassell added that it was the overdose of insulin which had led Mrs Thomas to suffer hypoglycaemia which in turn led to a heart attack.
She said: "With a heavy heart I must conclude that however caring a person the nurse was, the treatment of Margaret Thomas was negligent and that negligence was indeed gross."
The coroner also criticised Gwent Healthcare NHS Trust.
She said she had been impressed with the dedication of the people giving frontline care but was disturbed about the system they had been working under.
After the inquest, Mrs Thomas's son, Dr Hywel Thomas, said the family were "surprised" at the verdict and hoped the Crown Prosecution (CPS) would look at the case again.
"I think it's a very brave decision on behalf of the coroner especially after the CPS decided on no criminal action," he said.
Dr Thomas also said Gwent Healthcare NHS Trust had admitted liability and he would be meeting with them next month.
He said he hoped the family would be "reassured that policies and procedures will be urgently implemented to ensure that there will be no reoccurrence of these events".
Horror
The three-day inquest heard that Ms Evans had miscalculated in her head the amount of insulin to give Mrs Thomas as she used a regular syringe instead of a specific insulin syringe.
Ms Hassell said senior trust management had now decided that community nurses should be given a list of equipment to carry in their car.
But she said almost two years after Mrs Thomas's death this still had not been produced.
The inquest had previously been told of Ms Evans's horror at her realisation later in the evening that she had injected too much insulin into Mrs Thomas.
She said she reported her mistake to a doctor but the pensioner had already died.
She collapsed on her doorstep after returning from a shopping trip, the inquest was told.
Ms Evans told the inquest: "It was very extreme circumstances and there was an error on my part and I'm really sorry, I will always be sorry."
She told the court that she was visiting Mrs Thomas as a favour to community nurses in another area on 2 June, 2007.
Registered blind
She said she did not know until just before she arrived at Mrs Thomas's house at midday that the purpose of the visit was to administer insulin.
Mrs Thomas was registered blind and could not inject herself.
Ms Evans said Mrs Thomas gave her an insulin "pen" which she had never used before as they used a syringe and needle where she normally worked. She tried using three of the pens but could not get them to work, she said.
Ms Evans said she thought she had an insulin syringe in the car, but on fetching it, she discovered it was a regular syringe, not one for insulin.
She said she converted the amount wrongly in her mind and injected Mrs Thomas four times with the syringe, but mistakenly gave 10 times the dose of 36 units.
'High workload'
Following the verdict, Dr Thomas read a statement on behalf of himself and his brother Paul.
"We have heard evidence that in mid-2007 the community nurses in Torfaen showed great care, commitment and team work despite staff shortages and a high workload," he said.
"However, on June 2, 2007, nurse Joanne Evans made a number of very serious errors with catastrophic consequences for our mother, who died later that afternoon.
"Whilst Nurse Evans is obviously very sorry and distressed by her mistakes, it is apparent that there were failings in her training and clinical judgment to request further assistance.
"The verdict today confirms this."
Andrew Cottom, acting chief executive of Gwent Healthcare NHS Trust, said the trust would "like once again to offer our sincere condolences to Mrs Thomas's family".
"Mrs Thomas's death was a tragedy brought about by error which had disastrous consequences," he said.
"We heard that this mistake was completely out of character for a conscientious and caring nurse who is full of remorse."
Reference: BBC News, 27.03.09, <http://news.bbc.co.uk/1/hi/wales/south_east/7967862.stm>
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