The 36-year-old was sanctioned by the game's governing body for using a chant associated with a far-right political party after his country's play-off win over Iceland
In the wake of his nation's play-off victory over Iceland in Zagreb last November, the 36-year-old addressed the crowd with a microphone, saying: "For the homeland". In response to Simunic's call, the fans replied: "Ready!"
The call was used by the far-right Croatian rulers the Ustashas, who took a pro-Nazi stance during World War II before being dissolved in May 1945.
Simunic appealed against the severity of the sanction but the world governing body on Wednesday upheld the original ruling.
Croatia have been drawn against Brazil, Cameroon and Mexico in Group A of the World Cup and will contest the opening game against the hosts on June 12 in Sao Paulo.