The Ireland international was tipped to captain the side in the absence of Sam Warburton but was not included in the matchday squad, which effectively brings an end to the 34-year-old's Lions career.
Despite missing out on the clash, Gatland insists that O'Driscoll still has a role to play for the tourists ahead of the showdown in Sydney.
"Obviously he was pretty disappointed as anyone is disappointed but he appreciated the fact that he was spoken to before the announcement," Gatland said. "It's the first time any coach has ever had that decision with him in 15 years of rugby so it's not easy for that to be the first time.
"He's still going to be very important to us in the next 72 hours in terms of his experience and leadership.
"Jamie [Roberts] is back fit and has been given the nod in terms of his partnership with [Jonathan] Davies."
The series currently stands at 1-1 ahead of the decider in Sydney on Saturday.