The growing belief in the Algeria camp comes from them enjoying 'the best preparations possible', according to the coach.
At his news conference on Thursday, Halilhodzic said his team could produce an upset against Belgium at the Estadio Mineirao in Belo Horizonte.
"We can shock Belgium," he said.
"We are confident of our capabilities, our presence in Brazil is a dream we are currently living.
"I do not rule out the possibility of making a historic achievement for the Algerian football to go to the maximum possible stage in the World Cup."
Brazil 2014 is the fourth FIFA World Cup Algeria have competed in, having failed to get out of their group the previous three times.
After their opener against Belgium, Algeria face South Korea on June 22, and then wrap up their group stage fixtures against Russia four days later.
