The 32-year-old hard-tackling midfielder, who made his debut in 2001, has been replaced by Hassan Yebda who will be joined in the centre of midfield by French-born Medhi Lacen.
Saadane told a news conference the new captain would be Germany-based defender Antar Yahia, who scored the stunning volley that secured their World Cup ticket when Algeria beat Egypt 1-0 in a playoff in November.
The only African coach at the first World Cup on the continent said his selection had to be based on form and that meant taking tough decisions in the interests of the team.
"For any player, it is always difficult to explain to him, to make him understand he's lost his placed due to competition," said Saadane, who returns to the World Cup at the helm of his country's team 24 years after his previous appearance.
"We must do it, even if it's painful."
He said Algeria's preparations had been marred by injuries but all those carrying knocks were now back and the squad had finally been able to work well together over the past week.
WEAKEST SIDE
The 64-year-old, who is in his fifth spell as Algeria coach, has galvanised the team, pushing them through the early stages of the World Cup qualifiers and then seeing off up-and-coming Zambia as well as arch-rivals Egypt.
He acknowledged Algeria were considered the weakest side in Group C but said this could play in their favour as there was no pressure or expectation.
The Algerians also face England, who are among the favourites to win the tournament, and the United States.
While Algeria have never got past the first round in their two previous World Cups in the 1980s - and have exceeded expectations just by making it to South Africa - they did stun West Germany in 1982 by winning their opening match 2-1.
"We will play each game like a cup match. We are going to compensate for our technical weaknesses with the desire we have always shown in our qualifying matches," said Saadane.
He added that Slovenia would be extremely tough opponents because they had not suffered many injuries, nor had to change their lineup much and this meant trying to strike a good balance between defence and attack.
Yebda told reporters the composition of Group C meant the result against Slovenia could determine the success of their campaign: "We have to win. We'll do everything to win."
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