Despite the fact that the 33-year-old had scored over 8,000 Test runs, Pietersen was informed that he would no longer be considered for selection shortly after the squad had returned from Australia, with squad harmony the major factor behind the judgement.
However, Chappell, who was speaking following the 2013 ESPNcricinfo awards, which recognises the best individual batting and bowling performances in cricket over the calendar year, has insisted it should have been captain Alastair Cook's place that was called into question and not Pietersen's.
"It's a ludicrous decision, particularly to come up with the excuse that they are trying to bolster the captain by getting rid of the best player - that is ridiculous. Any England players that weren't exasperated by Alastair Cook's captaincy, they are the ones that should have been demoted, not someone that was querying it," said the former Australia captain.
Pietersen featured in 104 Tests for England.