The former Atletico Madrid forward was sent off for appearing to bite Everton's Gareth Barry on Saturday, but Hiddink feels his player gets treated unfairly.
"[It's] too strong. If you know the definition of an idiot, that is not him," he told reporters. "It’s not always if you are in the very hectic situation, it’s difficult.
“That’s why I defend him - his contribution is brilliant. I judge him fairly."
The Blues interim boss, who is expected to leave Stamford Bridge at the end of the season, also accused the FA of actively looking for a reason to punish Costa, as the striker was banned despite Barry denying that a bit had taken place.
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“Of course he was not happy," Hiddink said of Costa, following the FA charge. "He will see if he gets the other game as well.
“Maybe there was a little bit searching [for an FA punishment] for Costa - where can we get him? He is frustrated.
“I think he was not happy with it, of course, and will it go to a third game? Yes or no. He desperately wants to play of course, he accepts he is suspended but is not happy with it.
“The kiss, or bite, whatever you mention it, Barry made a very good statement by saying what has happened or not happened in this case."