"From a form perspective, yeah, I don't think his [Super Rugby] form has been brilliant, to be honest," Cheika said.
"I have had a long talk with him yesterday and I don't want to breach that code of coach-player by giving out too much detail, but one of the big things is for him to look like he is enjoying his footy.
"Getting out there and really being a competitor for that 10 jersey. We have had a talk about the reasons why, and obviously a lot of that is trying to get him back into a space where he can be that player that's going to get us around the park and do the stuff that we want him to do.
"I don't feel like that's been happening and I feel like, at a certain point, I have to change things. With a bit of congestion now in the midfield players, with Beale back and some of the options around the 10 position, I decided that's the way to go."
Asked if he thought Cooper would fight to win his position back, Cheika said: "I'd say that's his natural character, yes. He is also a very senior plater, as well, and you want your senior players to have that attitude when they face adversity ... that they show resilience."
Cheika said he'd omitted Higginbotham for a lack of impact in the June series.
The 38-man squad contains 11 uncapped players, with Billy Meakes, Curtis Rona, Campbell Magnay, Jordan Uelese, Isack Rodda, Adam Korczyk and Sef Fa'agase all called into their first full Wallabies squad.
The Force were rewarded for their strong season with the inclusion of nine players. The Waratahs, traditionally a big supplier of Wallabies players, could only get 10 in, after a very poor season.
Taniela Tupou and Izzy Perese are also back in the squad, and so is Samu Kerevi, who missed June with injury. Nick Phipps returns at the expense of Jake Gordon.
Young front rowers Uelese and Jermaine Ainsley have both won call-ups in a nod to the future.
After both missed selection in June, Reds locks Rob Simmons and Kane Douglas have also been given the opportunity to earn their way back into Cheika's plans, via strong training performances.
James Slipper, Lukhan Tui and Kyle Godwin were not considered due to injury.
WALLABIES EXTENDED SQUAD
Forwards
Jermaine Ainsley, Western Force
Adam Coleman, Western Force
Pek Cowan, Western Force
Jack Dempsey, NSW Waratahs
Kane Douglas, Queensland Reds
Sef Fa'agase, Queensland Reds
Tetera Faulkner, Western Force
Ned Hanigan, NSW Waratahs
Richard Hardwick, Western Force
Michael Hooper, NSW Waratahs
Sekope Kepu, NSW Waratahs
Adam Korczyk, Queensland Reds
Tolu Latu, NSW Waratahs
Sean McMahon, Melbourne Rebels
Stephen Moore (c), Queensland Reds
Tatafu Polota-Nau, Western Force
Tom Robertson, NSW Waratahs
Izack Rodda, Queensland Reds
Rob Simmons, Queensland Reds
Lopeti Timani, Melbourne Rebels
Taniela Tupou, Queensland Reds
Jordan Uelese, Melbourne Rebels
Backs
Kurtley Beale, NSW Waratahs
Israel Folau, NSW Waratahs
Bernard Foley, NSW Waratahs
Will Genia,
Dane Haylett-Petty, Western Force
Reece Hodge, Melbourne Rebels
Karmichael Hunt, Queensland Reds
Samu Kerevi, Queensland Reds
Marika Koroibete, Melbourne Rebels
Campbell Magnay, Queensland Reds
Billy Meakes, Western Force
Eto Nabuli, Queensland Reds
Sefa Naivalu, Melbourne Rebels
Izaia Perese, Queensland Reds
Nick Phipps, NSW Waratahs
Curtis Rona, Western Force