"I just had to make a decision not so much about the recent history but the last six months, in terms of form and fitness, there just wasn't enough evidence there for me to say that he'd be able to hold up in the World Cup."
Midfielder Mile Jedinak is favoured to replace Neill, who struggled for consistent game time since his stint in Japan ended last November.
The veteran of 96 internationals - 60 as captain - signed with English championship team Watford in February before a loan move to Doncaster Rovers.
"He was probably a little bit unlucky in a couple of the moves he made ... if post-Christmas, from January onwards, if he'd had four months of football under his belt I guess a different decision would have been made," Postecoglou said.
"It's not easy. He has shown outstanding determination and it's a credit to him, you can see why he has played for his country as many times as he has and why he was a leader.
"He has certainly gone down fighting.
"It's a sad time in the bubble of the moment.
"Somebody as decorated as him, it is a tough decision to deny him the opportunity of going to a third World Cup.
"It's a decision that weighs heavily on me."
Postecoglou will next week announce a 30-man preliminary squad for the World Cup.
- AAP
