But the side finished last in the group, failed to score one goal, and was a hard-luck victim of Landon Donovan's stoppage-time winner for the Americans in the final group-stage game.
This time around, however, Algeria won't have to worry about the U.S., as the side was drawn into a rather favorable Group H along with Belgium, Russia, and South Korea.
The Desert Foxes progressed through African qualifying with little trouble early in the campaign. They began the road to Rio by cruising past Mali, Benin and Rwanda in group play, but struggled down the stretch and secured a place in Brazil by topping Burkina Faso in a two-legged playoff on away goals.
Halilhodzic has a case for being the most interesting manager in the tournament. He fled Herzegovina in the early 1990s and worked his way up the coaching ranks. He led Raja Casablanca to an African Champions League title and also had a stint as manager of Paris Saint-Germain.
Algeria's key piece is midfielder Sofiane Feghouli, who plies his trade for Valencia in La Liga. At just 24 years of age, Feghouli has blossomed into Algeria's most creative player. He began his international career on the right wing but has since moved into a more central role.
His versatility and excellent work rate will be a major factor for the Desert Foxes, especially when the club comes up against more technically-gifted teams like Belgium.
Joining Feghouli in the midfield is youngster Nabil Bentaleb of Tottenham- Hotspur. Bentaleb has had an excellent last few months. He was promoted to Spurs' first-team following the appointment of Tim Sherwood as manager and has not looked out of place in the English top flight.
At just 19 years old, Bentaleb will need to find his game quickly to cope with the pressure of playing in a World Cup.
Leading the line will be Sporting Lisbon striker Islam Slimani, who had a fine domestic season for the Portuguese side and was voted 2013 Algerian Footballer of the Year. He led the Desert Foxes in scoring during the qualification cycle with five tallies and will be counted on to regularly find the back of the net.
Defender and captain Madjid Bougherra will anchor the back line as a commanding presence in the penalty area. Bougherra scored the winning goal against Burkina Faso to send the Algerians to Brazil.
Being drawn into one of the weaker groups in the tournament certainly benefits the Algerians, who should be able to give both Russia and South Korea a fight.
Algeria is a young team, but one that could challenge for second place in Group H if things go their way.