Juventus defender Chiellini was banned for three matches on video evidence after an altercation with Roma attacker Miralem Pjanic in the Serie A on Sunday.
Prandelli's code of ethics, which warns players against ill-discipline at club level, were expected to potentially see Chiellini left out of Italy's 30-man FIFA World Cup squad.
But former Italy international Gattuso said the code was hard to enforce, while pointing out Chiellini's importance to Prandelli's side.
“Prandelli adopted the code of ethics, but it is a tough thing to implement. Chiellini is an important player and he couldn't leave him out," Gattuso told Radio Sportiva.
"In any case, his half an elbow on Miralem Pjanic didn't seem all that violent."
Italy have been drawn in a tough Group D at the World Cup, taking on Uruguay, England and Costa Rica.
Gattuso said hosts Brazil and Germany and Argentina were the teams to beat at the World Cup.
He also warned Prandelli of Italy's slow starts, with the four-time world champions having failed to win their opening games at the past three major tournaments.
"Brazil are the team to beat at the World Cup, but the Germans always go far and watch out for Argentina, as now they are very organised," Gattuso said.
"Italy are a strange side, as we need a bit of itching powder on the backside to get us going. History teaches us this."
