The 22-year-old forward, who has four goals to his name at the showpiece event, picked up an injury to his back in the Selecao's 2-1 victory against Colombia, which saw them book their place in the final four.
Brazil will now face Germany in the semi-finals without Neymar and suspended captain Thiago Silva, which Raul says will make life extremely difficult for the tournament hosts.
"Neymar is out of the World Cup with a broken vertebra and that means [Brazil] will be half the force when they line up against Germany," the Real Madrid legend is quoted as saying by Goal.com. "On top of that, Thiago Silva is suspended so they will miss two of their most reliable performers in two key departments.
"It's terrible from a Brazilian perspective because Neymar was the only one in their forward line who looked threatening. Although he didn't have a great game against Colombia, players like him can come alive like a spark and change the course of a match in an instant.
"Missing him against Germany is a massive blow but that's life and football. His teammates will have to give everything that they have and see if they can win it for him."
Brazil's encounter with Germany kicks off at 9pm on Tuesday night.