The ruling comes three years after capital punishment was abolished in the state, but for future crimes only.
The supreme court's decision means 11 of the state's inmates still on death row will now be spared.
Connecticut has had just one execution since 1976. Thirty-one US states still allow executions.
The ruling came in response to an appeal by convicted murder Eduardo Santiago, who was sentenced to death by lethal injection in 2005.
"We are persuaded that... this state's death penalty no longer comports with contemporary standards of decency and no longer serves any legitimate penological purpose," it said.
It noted a "freakishness" in the use of the punishment, with what it said was a wide disparity in its application.
Connecticut supreme court judge Richard Palmer said the death penalty amounted to "cruel and unusual punishment" and violated the state's constitution.
New Hampshire is the only north-eastern state to still keep capital punishment, though its last execution was carried out in 1939. The latest state to abolish the death penalty was Nebraska in 2015.
Source: Death Penalty Information Center
Why is the US Supreme Court reviewing the lethal injection?
A top court in the US state of Connecticut has overturned the death penalty for inmates on death row, deeming it unconstitutional.