Needing a draw against Russia to progress from Group H, barring a heavy victory for South Korea against Belgium, Halilhodzic watched on as his side drew 1-1 with Russia to qualify in second place.
Algeria famously exited the finals 32 years ago in Spain when West Germany and Austria played out a mutually beneficial 1-0 scoreline, but there were scenes of jubilant celebration this time as Islam Slimani's header cancelled out Aleksandr Kokorin's early opener in Curitiba.
And an emotional Halilhodzic was understandably delighted after the final whistle, with Algeria now set for a last-16 showdown with Germany in Porto Alegre on Monday.
"I am very proud, we played a heroic match and we deserved to qualify," he said.
"We're very, very proud. We've progressed so much over the past three years and this is a real gift for us.
"We've received support from all over the Arabic world - and that has been wonderful.
"The people here in Brazil also appreciate our sincerity and enthusiasm and I'm proud of that.
"But more than that, I'm proud of the way the team has played.
"Everyone will now talk about 1982 when Algeria beat Germany, but 32 years ago is a long time."
