Jon Jones says he's a fool for passing up a chance to hang with Muhammad Ali ... and tells TMZ Sports the regret's still eatin' him up.

In a few words -- "That really sucked."

Jones has met a who's who of legendary fighters in his life ... but told us he backed out of a dinner with The Greatest cause he was afraid to see one of his heroes in such a bad way.

Ali battled Parkinson's for years and one of his friends advised him not to meet with his hero because Ali was a shell of his former self and "it won't be everything that you thought it would."

"I backed out on that opportunity. But I regret that BIG TIME."