UEFA expelled the Polish champions from the competition after the ineligible Bartosz Bereszynski appeared in the 2-0 second leg victory over Celtic on Wednesday in the third qualifying round.
That decision meant Celtic, who were beaten 6-1 on aggregate against Legia, were awarded a 3-0 default victory and will now face Slovenian side Maribor in the play-offs.
But former Rangers defender Berg has slammed UEFA's decision and promised to challenge the judgement.
"We will appeal this, definitely. We will go as high as we can because we do not think this is the right decision," Berg told Sky Sports.
"We are absolutely shocked at this decision.
"For UEFA to make this, with the consequences of it for what has happened, is unbelievable."
A row erupted when UEFA ruled that Bereszynski had not served a three-match ban for his sending off against Greek side Apollon in last season's Europa League.
This was despite the Polish international sitting out Legia's second-round qualifying tie with St. Patrick's and the first leg against Celtic. UEFA claim he was not registered against the Irish side and the ban was not fulfilled.
Berg believes that the punishment is unduly tough for what he believes to be an administrative oversight.
He said: "He should have been ok. The technical mistake which our administration made was not to put him in the squad for the two first games against St Patrick's for him to serve his suspension.
"He has been registered to us for all this time so we were not trying to hide anything.
"This has been open and this is just a little small technical mistake in the administration and the consequences for us now is very, very difficult to take."
The Norwegian says there is a precedent in place for dealing with unregistered players dating back to Hungarian side Debrecen, and has urged UEFA to show consistency.
"In 2010 Debrecen also used a player and their case was not even as strong as ours and UEFA told them because they acted in good faith the result stood and it was not affected," he added.
