The defender has not played for his Ligue 1 side Nice since mid-October after he caused a furore posting a video in which a Palestinian preacher purportedly threatens Israel with a "black day".
Atal shared the video on his Instagram account, which has 3.2 million followers, shortly after the attack by Hamas militants on Israel on October 7th in which 1,139 people were killed.
He quickly deleted the post and issued an apology, but was suspended by his club while prosecutors probed the incident for suspected "justification of terrorism".
But they dropped that line of investigation after watching the video and questioning the player, instead charging him with "incitement to religious hatred".
Atal was suspended for seven matches by a French Professional Football League disciplinary committee but he has played the last three international matches for Algeria.
There is no room in the squad, though, for West Ham forward Said Benrahma, who has been left out in the cold after he had a furious row with Belmadi when he was substituted during the friendly with Egypt in October.
Belmadi has kept faith with several of the key players from the 2019 Africa Cup of Nations winning side.
Former Manchester City star Riyad Mahrez, one of several ageing stars to move to Saudi Arabia, Islam Slimani, who at 35 is plying his trade in Brazil, and AC Milan's Ismael Bennacer, make the squad.
Algeria have been drawn in Group D alongside Angola, Burkina Faso and Mauritania.
The biennial tournament is being hosted by Ivory Coast and runs from January 13th to February 11th.
Squad
Goalkeepers: Anthony Mandrea (Caen/FRA), Rais M'Bolhi (Belouizdad), Oussama Benbot (USM Alger)
Defenders: Youcef Atal (Nice/FRA), Kevin Guitoun Van Den Kerkhof (Metz/FRA), Rayan Ait-Nouri (Wolves/ENG), Yasser Larouci (Sheffield United/ENG), Aissa Mandi (Villarreal/ESP), Mohamed Tougai (ES Tunis/TUN), Ramy Bensebaini (Borussia Dortmund/GER), Ahmed Touba (Lecce/ITA), Zineddine Belaid (USM Alger)
Midfielders: Ismael Bennacer (AC Milan/ITA), Houssem Aouar (AS Roma/ITA), Hicham Boudaoui (Nice/FRA), Nabil Bentaleb (Lille/FRA), Sofiane Feghouli (Karagumruk/TUR), Ramiz Zerrouki (Feyenoord/NED), Fares Chaibi (Eintracht Frankfurt/GER)
Forwards: Riyad Mahrez (Al-Ahli/KSA), Islam Slimani (Coritiba/BRA), Mohamed Amoura (Saint Gilloise/BEL), Baghdad Bounedjah (Al-Sadd/QAT), Amine Gouiri (Renne/FRA), Youcef Belaili (MC Alger), Adam Ounas (Lille/FRA)
