The LA Galaxy midfielder was considered likely to be involved at London 2012 but it was revealed on Thursday he would not be in the squad.
The former Tottenham boss thinks Pearce will have upset a lot of people with the omission of the 37-year-old former Manchester United man.
Redknapp said to The Sun: “There is no doubt Stuart will have upset a few in high places. They would have loved to see Becks in there. I am surprised and sad that he isn't.
“Stuart can kiss goodbye to a knighthood but credit for being brave. He is the manager and should be allowed to pick who he wants.”
Redknapp tried to sign the winger earlier this year when he was still manager at White Hart Lane to no avail, and the coach admits he would have chosen the ex-England captain if he was in Pearce’s shoes.
“I have to say that I would have picked him,” he told Sky Sports.
“David has been a fantastic servant to all his clubs and a tremendous ambassador for football.
“He trained with Tottenham in January 2011 and we looked at signing him on loan when the American season ended. Putting him in the Olympics squad would not have hurt.
“Fair play to Stuart. He's always been his own man, which is what you have to be if you want to make it as a top manager.
“It's up to him to select the best squad at his disposal, that's what he believes he'll do.”