The 25-year-old did play for Brazil during the recent international break and while Klopp agreed Coutinho could have come on at some point at City, he said it made more sense to get the player fit and ready for the rest of the season.
"I had to make a decision. We now have seven games in the next three weeks," Klopp told a news conference on Friday.
"Before he went to Brazil he couldn't train for about three weeks, so that means now we have to now prepare him for the rest of the season, which is difficult with our fixtures and our schedule.
"So I decided to leave him out for City. We can use this four or five days for real and proper training... He could have played 15-20 minutes for us again in the City game, maybe longer, but I think it makes sense."
The German also played down suggestions that Coutinho's failed transfer could have a lingering impact his mindset, saying the player had accepted the disappointment of not getting his move to Spain.
"Nothing that I'm aware of was unforgivable," Klopp said. "It wasn't clear, it was not an easy time, but that is the transfer window and this is the only time when people can make transfers.
"I think we handled it really well... It's a normal thing, he came in yesterday and accepted the situation. And now we should use the situation with a wonderful player in our squad who wants to get fit and play for this club."
(Reporting by Simon Jennings in Bengaluru; Editing by Toby Davis)
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