Peng died before he could be treated in hospital with life-saving anti-venom, police said.
"It is a highly unusual case, but it appears to be just an accident," a police spokesman said. "He prepared the snake himself and was just unlucky.
"There was nothing that could be done to save the man. Only the anti-venom could have helped, but this was not given in time. It was just a tragic accident."
Diners who were eating in the restaurant at the time of the incident described screams coming from the kitchen.
Lin Sun, 44, who was dining with his wife Su said: "We were in the restaurant having a meal for my wife's birthday when suddenly there was a lot of commotion.
"We did not know what was happening but could hear screams coming from the kitchen. There were calls for a doctor in the restaurant but unfortunately by the time medical assistance arrived, the man had already died. After we heard that we did not continue with our meal."
According to snake expert Yang Hong-Chang, all reptiles can function for up to an hour after losing their body parts.
"It is perfectly possible that the head remained alive and bit Peng's hand," he said. "By the time a snake has lost its head, it's effectively dead, as basic body functions have ceased, but there is still some reflexive action.
"It means snakes have the capability of biting and injecting venom even after the head has been severed."
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