The Gunners were beaten 1-0 at Villa Park and Mikel Arteta's men were left frustrated by a decision which went against them in the closing stages.
Eddie Nketiah's strike was ruled out for a Kai Havertz offside after a lengthy VAR check and the German was furious, with the ball having hit his arm from close range.
Speaking after the game on Sky Sports, Redknapp said: "It's a rubbish rule. How can that be a handball? It struck Matty Cash. It is just rebounding around. It may just drop onto his hands and he knocks it into the net.
"The law being if you are the goalscorer and it touches your hands before you put the ball into the net, it's not going to count.
"We are getting ourselves into such a mess with these rules all the time. How on earth can that be a handball? It's the rule at the moment. But if we are trying to be helpful and trying to improve to make it a best place for more goals, someone must look at goal."
And he added: "It's a bad rule. It had grazed his arm. If he sticks his arm out and then it hits the hand, then it would be a handball anyway. Whoever has decided to come up with that as a law, I think it's ridiculous. It cost Arsenal a goal."
Villa went on to win thanks to John McGinn's goal after just seven minutes and Unai Emery's side are now just a point behind Arsenal after 16 games.
The Birmingham club lie third in the table, two points adrift of leaders Liverpool, and have won their last 15 Premier League games at Villa Park under Emery.
More Arsenal stories
But the Gunners could be about to sign a highly-rated European wonderkid.
Thank you for reading 5 articles this month* Join now for unlimited access
Enjoy your first month for just £1 / $1 / €1
*Read 5 free articles per month without a subscription
Join now for unlimited access
Try first month for just £1 / $1 / €1