Algeria have set an objective of reaching the semi-finals at the tournament in South Africa, which starts on January 19, but said the Franco-Bosnian coach will stay in place for the course of his contract through 2014.
"Halilhodzic will continue coaching even if there is failure in South Africa. It will not cost him his job if our objective is not achieved," said Algerian Football Federation president Mohamed Raouraoua, a FIFA executive committee member.
"There will be the qualifiers for the World Cup to play straight afterwards, we do not intend to dispense with his services. He passed the first challenge to lead the team to the Nations Cup finals," he told a news conference.
"Halilhodzic is building a competitive young team that can play two World Cups. Let him work on the long term."
Algeria face a tough test at the Nations Cup where they are paired in their opening round group with favourites Ivory Coast, Togo and Tunisia.
In March they host Benin in their next 2014 World Cup qualifier. Algeria have three points from their first two matches in Group H.