The 60-year-old actor - who portrayed drug lord Tuco Salamanca in the AMC crime drama - was detained on Monday on suspicion of misdemeanour battery.
According to TMZ, Cruz was washing his car outside his home in the Silverlake area of Los Angeles when he asked a woman to move out of the way, but when she did not she allegedly got sprayed with water and believes it was on purpose.
He has been released from custody and is due in court on October 1.
Raymond's talent agent Raphael Berko claims Cruz was washing his car when a minivan containing three women parked "half an inch" from his bumper, and he asked them to move their motor.
Berko explained to People: "They said no. He goes, 'Come on, move your car. You're not giving me room, and it's going to get wet.'
"So, he said, 'OK.' He started to clean his car and then they started filming him.
"When he turned around to tell them to stop filming him, he was still hosing his car. And some of the water from his hose hit the front of his car and spilled on their car.
"And then believe it or not, one of them called the police.
"And somehow someone who's never been arrested in his life, someone who played a police detective for 15 years on The Closer and Major Crimes, someone who lives in that neighbourhood, was put in handcuffs and taken to jail.
"Raymond's very grateful to all of the LAPD personnel at the police department because throughout the five hours of him being in their jail, the LAPD were all very, very gracious and nice to him and reassuring."
LAPD officer David Cuellar also told the publication: "There was basically a dispute with the victim, which is when Cruz allegedly sprayed water towards the victim."
Misdemeanour charges have yet to be filed against him.
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