Also on the list: Randall Tobias, a former CEO of Eli Lilly, who resigned as deputy secretary of state last year after being linked to the service, and Harlan Ullman, a military strategist who created the concept of "shock and awe."
Palfrey has maintained that she ran a legal escort service whose employees were instructed not to have sex with clients.
Dickinson testified under grant of immunity, which the Navy says effectively precludes a court-martial or federal criminal prosecution.
However, the Navy says she may still face administrative punishment - such as an other-than-honorable discharge that would trigger a loss of benefits.
Dickinson, who is less than a year from being eligible for retirement benefits from the Navy, has won four Navy/Marine Corps achievement medals and two commendation medals in her military career, which began in 1986.
She was reassigned in May 2007 to the Naval Supply Corps School in Athens, Ga.
The Navy removed her from her duties and placed her on leave after being notified by federal prosecutors about her role as a witness in the D.C. Madam case, said Hanzlik, the Navy spokesman.
Dickinson "could be released from active duty without benefits. And for somebody who's a little better than 19 years of service, as you can imagine, that's a pretty substantial loss," Hanzlik said.
He added that Dickinson has received a letter of reprimand for conduct unbecoming an officer, relating to her involvement with Palfrey's firm.
Jonathan Gladstone, Dickinson's attorney, said she would not comment on the case but that her work for Palfrey was her only experience as an escort. He said that she hopes to retire with benefits from the Navy.
"Even if she is not prosecuted criminally, she will be paying a big penalty," Gladstone said. "If she is allowed to retire, it's not going to be with a 21-gun salute."
Dickinson was apparently nervous before her testimony. U.S. District Judge James Robertson told her to "take two deep breaths and relax, everything is going to be OK," according to the transcript.
She said that when she contacted Palfrey's firm, Pamela Martin & Associates, she spoke with a woman named Julia who described an evening with a client, saying, "You know you're not going there just to chat. Right? Yes or no is fine."
Dickinson said she responded yes.
