The 67-year-old agreed to return to the national team for a second in spell to replace Louis van Gaal, with Hiddink set to lead Netherlands through the 2016 European Championships in France.
However, his second stint in charge has started in inauspicious fashion with the team losing two of their opening three qualifying matches to Czech Republic and Iceland.
And Hiddink claims a failure to beat Latvia at the Amsterdam Arena on November 16 would prove the final straw.
"If we lose to Latvia then I'll take the logical step," he told a news conference.
"I haven't discussed it with the players but to me a draw too would not be acceptable."
Hiddink, though, believes there has been an overreaction to Netherlands' poor start and is fully confident they will recover from their slow opening and qualify for the quadrennial tournament.
"Yes we will qualify," he added.
"I don't like the drama that is now swirling around the team.
"There is an overreaction. But I have to accept it. The criticism is a lot harsher these days compared to when I first coached the team. But the media are competing much more with each other."
