Goalkeeper Azzedine Doukha, defender Nacereddine Khoualed, midfielders Ryad Boudebouz and Amir Karaoui and forward Foued Kadir are the other players to not make the final cut.Highly-rated Tottenham midfielder Nabil Bentaleb is included after forcing his way into the Premier League club's first team this season, as are Napoli's Faouzi Ghoulam and Porto attacker Nabil Ghilas.
Captain Madjid Bougherra has been quoted as saying the nation were "promising" supporters a spot in the second round.
His bold pledge may set Algeria up for a fall, given that Group H also features Belgium, South Korea and Russia.
Halilhodzic's side reached the World Cup finals after winning five of their six matches in African qualifying, with Sporting Lisbon striker Islam Slimani netting five times.
Algeria open their 2014 World Cup campaign against Belgium on May 17.
Squad in full:
Goalkeepers: Rais M'bolhi (CSKA Sofia), Cedric Si Mohamed (CS Constantine), Mohamed Lamine Zemmamouche (USM Alger)
Defenders: Essaid Belkalem (Watford), Madjid Bougherra (Lekhwya), Liassine Cadamuro Bentaiba (Mallorca), Faouzi Ghoulam (Napoli), Rafik Halliche (Academica), Aissa Mandi (Stade Reims), Carl Medjani (Valenciennes), Djamel Eddine Mesbah (Livorno), Mehdi Sebaa Mostefa (AC Ajaccio)
Midfielders: Abdelmoumen Djabou (Club Africain), Nabil Bentaleb (Tottenham), Yacine Brahimi (Granada), Sofiane Feghouli (Valencia), Medhi Lacen (Getafe), Saphir Taider (Inter), Hassan Yebda (Udinese), Riyad Mahrez (Leicester City)
Forwards: Nabil Ghilas (Porto), Islam Slimani (Sporting Lisbon), Hilal Soudani (Dinamo Zagreb)