Halilhodzic's men may have lost 2-1 to Belgium in their Group H opener, but they progressed to the knockout phase for the first time in their history after defeating South Korea 4-2 and then securing a 1-1 draw with Russia on Thursday.
Algeria, whose only three previous finals appearances ended in the group stage, finished second behind Belgium to set up a last-16 meeting with Germany, who will be seen as huge favourites by many.
However, Algeria defied expectations in 1982 in their very first World Cup match, beating West Germany 2-1 in Gijon.
And Halilhodzic thinks his team are capable of repeating history.
"There was already an unbalance in the group stage against Belgium and Russia, but in this World Cup, you never know," he told RMC.
"There are teams which are already gone because they thought they had already won before they played.
"And when you see the Italy, England, Portugal and Spain already eliminated, it is exceptional to be in the 16 best teams.
"Now, Germany has the right to lose. I said again that if in 1982 an Algerian team can beat a great team of Germany, then why can't we?
"If we lose, we will congratulate them because they will have been better and if we win everyone will appreciate this Algeria team a little more."
Halilhodzic feels Algeria have already won their equivalent of the World Cup final by getting past the group stage.
"For Algerians, we have already won the World Cup that they could expect," he added.
"It is the first time that Algeria qualifies for the second round of the World Cup, but I'm glad that we have expressed ourselves sportingly.
"We are the darlings of the Brazilians, a bit, who appreciate our game.
"We are one of the smallest teams, but we were the best in attack out of our group, and as a former striker I am proud of that.
"When you win, you must enjoy until the end, but without making a mistake."
While Halilhodzic looked back to 1982 for inspiration, midfielder Nabil Bentaleb acknowledged that Algeria were not even expected to progress past the group stage, but is confident another upset is within their grasp.
He said: "We are all delighted that we achieved our goal. It was to go through to the second round and we did it. We are all proud of this.
"We were considered as the underdogs in the group stage and we still made a surprise.
"Now, we are confident in our chances and we know we can make something if we are at our best. We will have to be up for the fight on Monday."
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