Q:

Why was Brooks released?  Couldn't he have squealed on the Shawshank crimes? 

Why was Brooks released in The Shawshank Redemption? 
The Warden would have Tommy killed to prevent Andy from having any chance of a retrial.  So why is Brooks not a threat?  Could he not himself report the crimes he witnessed in Shawshank once outside its walls? 
Is it that Andy is more dangerous because he knows about the books? 
Is Brooks expected to be treated as a senile old man by anyone he appeals to? 
Did the parole board insist that Brooks be released — a decision beyond the Warden's jurisdiction? 
Possibly, the Warden desperately wanted Andy to stay and help him launder money.  Andy was serving two life sentences and therefore stood less of a chance of being released under normal conditions.  The Warden also did not have to pay Andy for the service, nor worry about Andy squealing on him, since he would have thought that technically impossible. 
What are your thoughts? 

A:

Tommy could give first-hand testimony about what Blatch said, directly, which any lawyer could use to investigate Blatch's employment history and look for the documentation that Andy mentioned upon having a case re-opened.  Andy's background would make getting a really good lawyer a good possibility.   With Tommy gone, it becomes "Tommy told me that Blatch told him" - which is hearsay, and hearsay is not admissible in court. 
Now, Brooks might have been aware of dirt that went on, just like any convict, but he'd have no hard proof, and certainly not enough in-depth understanding to blow the lid off of anything.   His accounts would be to the effect of "the guards are all thugs, and the warden had a bunch of scams going on."   The kind of vague, unprovable assertion that every convict in every prison ever, anywhere, would say.   No threat to speak of. 
The warden didn't want Andy to not have a trial, but not so much because he feared exposure.  Andy was the mastermind that was the financial engine to the warden's scams.   While he may have dreamed of all this schemes to enrich himself, it wasn't until he tapped into Andy's knowledge of the system that he had a way to collect the money and avoid detection.  While he may have understood the mechanisms, in a general sense, if Andy went away, he couldn't be sure that the funds were able to be properly laundered, and the scams would have to stop or be scaled back.  He wanted Andy there so the money would, like the spice in Dune, flow. 
Since Andy constructed the scams he was able to break them down, but he really couldn't prove it until/unless he pulled the switch and had the actual books, where the entries could be traced and matched against actual transactions.   Even his own knowledge would not have been enough without the additional verifying evidence, so, really, Brooks' damage potential was pretty limited.   Plus, Brooks was not a particularly eloquent or sophisticated guy.   His ability to lay out a widespread, intermingled web of corruption in a clear and credible way would also be questionable.