The 20-year-old midfielder has been absent since straining a medial ligament in his right knee during the 2-2 friendly draw against Ecuador on June 4.
Oxlade-Chamberlain is making steady progress in his rehabilitation and Hodgson had initially hoped he would be fit to face Uruguay.
However, the Three Lions boss will not be risking the Arsenal midfielder at the Arena Corinthians on Thursday, despite the importance of winning the Group D encounter.
"He is not in contention for tomorrow, but he will take part in the next four training sessions," Hodgson said of his only injury concern.
"Today was his last training session as, if you like, an individual.
"At the minute, we could have taken a chance with him tomorrow, but it would be much better if he uses the four days after this game and before the Costa Rica game to train with the team.
"Fortunately for us, his actual injury has responded really well to treatment but I don't think we will put him into the firing line tomorrow before he has had some training sessions with the team."
Just like in the opening 2-1 loss against Italy in Manaus, Hodgson will tell his youngsters not to be afraid of going on the attack in Sao Paulo.
"We saw on Saturday night that even a top team like Italy got tested by the quality of our attacking play so we're not going to put any of our weapons down," the England manager said.
"Any weapon we've got we are going to try and use."
Hodgson is not a man for Churchillian speeches in the dressing room, so this was as close to a rallying call as we can expect to hear from the England boss.
Hodgson said he was unsure whether the Uruguay match should be regarded as the most important of his 39-year managerial career.
But the former Liverpool and Inter Milan coach clearly understands what is at stake.
"Even though it is the group stages, this is knock-out football," the 66-year-old said.
"It is an important moment. We want to stay in the competition and to do that we've got to get results in the next two games. No-one is running away from that."
Uruguay boss Oscar Tabarez has admitted Luis Suarez will not be at 100 per cent for the game.
"We will announce who will play tomorrow and not before," Tabarez told a press conference.
"He (Suarez) has recovered well but if he plays we must consider the possibility that he's not as well as he was during the Premier League.
"He has trained with his team-mates but training is not the same as a match.
"But even when not 100 per cent he is someone who can give a lot to his team. That's what we're considering right now."
Uruguay will be without captain Diego Lugano, who has a knee injury.
Liverpool flop Sebastian Coates could replace Lugano, who was recently released by West Brom.
Just after Uruguay lost to Costa Rica on Saturday, England fell to Italy 2-1 in Manaus.
Tabarez was impressed with England's attacking display but he thinks that does not necessarily mean they will put on a repeat performance in Sao Paulo.
"They played well but it doesn't mean they will play the same against Uruguay," he said.
"They have four very good, wonderful attacking players who are very fast, and are more than able to score.
"They were very direct and pragmatic. They are able to organise wonderful plays very fast."