Batsman Pietersen has been dropped from the Test squad following revelations that he sent text messages to his friends in the South African squad that were critical of some of his England teammates - actions for which he has now apologised.
Despite admitting that England will be weaker without the 32-year-old, Atherton has backed the squad to "carry on".
"The national team will always carry on," he told Sky Sports News. "There will be 11 players out there. If you lose someone like Kevin Pietersen you might not be as good as you once were and there is no doubt that Pietersen is one of the greats of the modern game.
"But the team goes on. That will be the case no matter who retires or who is dropped."
However, Atherton has also stated his wish to see the situation being resolved, resulting in Pietersen returning to the fold.
"My view is that in terms of his commercial appeal and the way people would view his career he would be better off trying to play well in the two Ashes series that are coming up, helping England win in India and helping England retain their number one status," Atherton added.
"That's my view, which is irrelevant to how he feels. How much does he want to earn from the IPL and the short termism of the contract paid by the Delhi Daredevils?
"I hope he comes round to the former point of view but I can't guarantee it."
Pietersen has made 88 Test appearances for England.