Prandelli, who says Rossi knew of his omission from the Italy squad before its announcement, has admitted that the risk of taking him to Brazil would be too large.
In the past, Prandelli has expressed concerns over the striker’s fitness - after he had to undergo two operations on his right knee.
"It would have been very easy to choose Giuseppe Rossi, but it would have been too big a risk,” Prandelli told reporters.
The coach’s comments came after Rossi took to Twitter to vent his frustration over his exclusion.
The 27-year-old, who finished as Fiorentina’s top scorer with 16 goals last season, claimed he was “saddened” and “disappointed” with the snub in a recent interview with Gazzetta dello Sport, while he also suggested the decision to leave him at home this season was laughable via Twitter.
In response to the tweets, Prandelli said: "On May 7, I planned to tell Rossi that he wasn’t in the 30-man provisional squad. Then I realised that his call up could provide a strong message, so I decided to include him in the 30, despite explaining to him that he wouldn’t be in the 23.
"I told him that it was a painful decision because he is an amazing guy. I repeated a few times: Beppe, you are not in the 23.
"Against Ireland I wanted to see more from him. I wanted a striker that played as a striker. I even subbed Ciro Immobile, and put Rossi as centre forward but I didn’t see what I wanted to see.
"I didn't expect to see what Giuseppe Rossi tweeted. He knew the truth.”
Rossi was also left out of former coach Marcello Lippi’s squad for the World Cup 2010 in South Africa, while he missed the Euro 2012 championship with a knee injury.
Prandelli was also quick to deny reports that Mattia Destro had refused to be a reserve for the World Cup.
"I asked Mattia Destro to come to Brazil as a reserve. He replied that he would think about it.
"When I originally asked everyone of their availability to be reserves, three of them said yes, and they are all now in the final 23,” the coach concluded.
Italy face Luxembourg in a friendly match on Wednesday, before they head into group games against Uruguay, Costa Rica and England.