I would advocate taking another look at ['seasons'](http://warlight.uservoice.com/forums/77051-warlight-features/suggestions/1521999-ladder-seasons-?ref=title
) as Eitz mentioned above. I think it incentivizes players to play more games as the final rankings for each season would be permanently posted on profiles (perhaps just a participation star for the lower 50 percent or something?). Each new season would be a total fresh start and we wouldn't have to worry about rating decay at all.
However, if we do keep the current system and wish to mitigate the drastic shifts that rating decay can have we might consider something such as
Games after 3 months count 75% towards total rating
Games after 4 months count 50% towards total rating
Games after 5 months count 25% towards total rating
Games after 6 months count 0% (or 10% if it is decided that it is better for games to always have at lease SOME influence on current rating) towards total rating.
I would especially like to see a season-ending tournament of some type, even if only the top 64 (insert arbitrary number here) qualify. This would of course require a change in tournaments that would place players in the bracket based on rank (1v64, 2v63 etc).
Just a few quick thoughts.