Mila Kunis -- Chicken Lawsuit Dropped ... It's In God's Hands Now!

Mila Kunis' chicken nightmare is over ... the "former friend" who accused her of chicken-napping has decided to leave the legal system out of it ... and let God handle things from here.

Kristina Karo tells TMZ she has decided to drop her $5,000 lawsuit against Kunis for allegedly stealing her chicken named Doggie 25 years ago. Karo says after much discussion with her therapist, "I've learned to forgive in my heart the people who have wronged me, like Mila."

Karo -- an aspiring singer -- says her story resonated with her fans (?), who helped raise the money to cover her therapy bills ... so the lawsuit became unnecessary.

She says of Mila, who called BS on the lawsuit from the beginning, "There is only one judge and that is God. I pray for her soul and the soul of Doggie, that he has found peace finally in chicken heaven."

RIP Doggie.