Simunic was handed the suspension by world football's governing body for what was described as "discriminatory behaviour".
Dinamo Zagreb defender Simunic received the ban for his actions as he celebrated Croatia's qualification for the FIFA World Cup following their 2-0 play-off win over Iceland in November.
The 36-year-old addressed supporters with a microphone shouting "U boj, u boj" (to the battle), "za dom" (for the homeland). The fans replied by yelling "Spremni" (We are ready).
The cry was used by the Croatian pro-Nazi puppet regime, the Ustashas, who ruled the state when thousands of people were killed in concentration camps during World War II.
Simunic appealed to CAS after seeing the ban upheld by FIFA following his initial plea in March, but his quest to have the decision overturned has ended in failure, meaning that he will definitely miss the World Cup in Brazil.
A CAS statement read: "The Court of Arbitration for Sport (CAS) has rejected the appeal filed by the Croatian football player Josip Simunic against the decision of the FIFA Appeal Committee issued on 21 February 2014.
"The CAS confirmed the sanction imposed by FIFA against the player, who remains suspended for 10 official matches, the first of which has to be served during the final competition of the 2014 FIFA World Cup, banned from entering the confines of the stadiums for those 10 matches and also fined CHF (Swiss Francs) 30,000.
"On April 9, 2014, Josip Simunic filed an appeal with the CAS and requested that the sanctions be cancelled or, alternatively, be stayed for a probation period of one year.
"The player stated that he did not have the intention to offend or discriminate anyone but that he wanted to share his patriotic emotions with the fans after such an important success.
"The parties were heard at a hearing which took place at the CAS offices on May 8, 2014.
"The CAS arbitrators in charge of this matter unanimously rejected the arguments of the player and dismissed his appeal.
"They confirmed that the expression used by Simunic was a clear and unequivocal reference to the call used by the Ustase and that such expression has to be sanctioned in accordance with Article 58 para. 1 of the FIFA Disciplinary Code. Accordingly, the CAS Panel confirmed the FIFA decision which was appealed against."
