Cahill was left out of the 23-man squad named on Tuesday for the clashes with New Zealand in Adelaide on June 5 and Serbia in Melbourne two days later along with fellow marquee players Harry Kewell and Mark Schwarzer.
"Looking back to our (Asian Cup) campaign in Qatar, he carried a very niggling injury over the tournament which carried on with Everton," the German told a news conference on Tuesday.
"I already told him in March that I would not consider him for these games, I think it's more important for him to have a good rest, to have treatment and to fully recover because we need him for the qualifiers."
"I had the feeling that he was not very comfortable about his performance level," said Osieck. "So I said 'don't worry, I won't call you up, I don't want to get you into any kind of predicament'."
Kewell's club mate Lucas Neill was named as captain despite a groin problem but might not play both matches, Osieck said.
"He's very committed to the Socceroos and to Australia and he desperately wanted to be in the group," the former Germany assistant coach said.
"I know he has made great progress in rehab and his presence in the group is very important for the boys. If he's in the position to play two full games remains to be seen."
Australia are 20th in the FIFA world rankings and Osieck's nine months in charge have taken in an appearance in the final of the Asian Cup in January and a 2-1 victory over Germany in their last outing.
Although the Socceroos have played regular games against New Zealand since 1922, they have met Serbia just once in the group stage of last year's World Cup, where they ran out 2-1 winners.
"It definitely cannot be considered a second string team," he said. "My firm conviction is that whenever anyone gets invited to the national team, he must be good enough to play there."
