The 19-year-old is a replacement for the injured Saphir Taider and will be hopeful of working his way into the starting XI for the tournament in Gabon.
Former France under-18 international Bennacer switched his international allegiance in July last year and joined Arsenal from Ligue 2 side Arles-Avignon in August 2015.
He admitted shortly after joining that he chose the Gunners over Manchester City due to the French influence at the club.
"I was a little worried in my head about going abroad," he told L'Equipe.
"I have never left home before, I thought about staying in France in order to accumulate game time too.
"[Arsenal is] the most French of the English clubs.”
Algeria kick off their Africa Cup of Nations tournament with a match against Zimbabwe on January 15, before playing Tunisia four days later.