Recommended on both Lifehacker (HERE) and on MakeUseOf (HERE), CamStudio is able to do want you want. CamStudio is a free and open source program that comes with good amount of features, including Visual Click Feedback (the feature you were seeking).
The forum post HERE details what you need to do to enable Visual Click Feedback. After you have downloaded and installed CamStudio, it instructs you to go to Options>Cursor Options and enable Highlight Cursor and Enable Visual Click Feedback. The next time you record your screen, you will notice the desired "ripple effect."
Please note: the ripple effect will not show WHILE you are recording, it is only visible in the recorded video.