Banega, 25, has been on loan at Newell's from La Liga club Valencia, and the Rosario-born man was widely tipped to make the final cut for Brazil.
But he joined Atletico Madrid's Jose Sosa and Nicolas Otamendi of Atletico Mineiro, as the discarded three from Sabella's preliminary squad.
Regardless, the Argentine squad is stacked full of attacking quality, looking no further than Lionel Messi, Sergio Aguero, Gonzalo Higuain and Ezequiel Lavezzi.
Midfielder Fernando Gago made the cut despite fitness concerns and has overcome his left-knee injury to make the final 23.
Squad in full:
Goalkeepers: Sergio Romero (Monaco), Agustin Orion (Boca Juniors), Mariano Andujar (Catania)
Defenders: Pablo Zabaleta (Manchester City), Ezequiel Garay (Benfica), Federico Fernandez (Napoli), Marcos Rojo (Sporting Lisbon), Hugo Campagnaro (Inter Milan), Jose Basanta (Monterrey), Martin Demichelis (Manchester City)
Midfielders: Angel Di Maria (Real Madrid), Fernando Gago (Boca Juniors), Javier Mascherano (Barcelona), Lucas Biglia (Lazio), Maxi Rodriguez (Newell's Old Boys), Ricardo Alvarez (Inter Milan), Augusto Fernandez (Celta de Vigo), Enzo Perez (Benfica)
Forwards: Lionel Messi (Barcelona), Sergio Aguero (Manchester City), Gonzalo Higuain (Napoli), Rodrigo Palacio (Inter), Ezequiel Lavezzi (PSG)
