Eileen Maguire, 69, died after the three-car crash on the Belfast Road in Fivemiletown in November 2013.
Her family told BBC News NI that they were disappointed with the sentence.
Damien Maguire, 43, from Knockonny Road, Ballygawley, pleaded guilty to causing death by careless driving.
He also admitted causing grievous bodily injury to Mrs Maguire's husband and son, as well as his own wife.
The judge told Mrs Maguire's family "nothing I can say or do can bring back Eileen Maguire".
In all of the circumstances the Dungannon Crown Court judge said he was "left with the firm view" that justice could not be served by a custodial sentence.
The court had also heard that Mrs Maguire, the owner of a restaurant from Lisnarick, was being driven home by her husband and son after attending her brother-in-law's funeral in Belfast.
Earlier, the judge told Maguire that while he had no "visual cue" in the eight to ten seconds before the crash, he had seriously failed to appreciate that the cars in front "were getting closer and closer and closer" regardless of "whether or not brake lights were illuminated".
The judge said that as a result, "there was a serious head-on collision" and such were the injuries of Mrs Maguire, she "unfortunately passed away".
Prior to the tragedy, said the judge, Maguire "lived an absolutely blameless life, he has succeeded in business, and contributed to the community, engaged in charitable work".
Reading from a statement written by Maguire, his lawyer acknowledged he could "never turn back the clock", and accepted there was nothing he could do to mitigate the loss of Mrs Maguire.
"I am deeply sorry for the pain and anguish I have caused that family," read the statement.
A County Tyrone car dealer, whose driving caused the death of a pensioner, has been given a community service order and a three-year driving ban.