Kennedy's participation is in the balance, with club side Nagoya Grampus unwilling to release the 31-year-old striker.
"Nagoya created a number of problems for us in not releasing Josh Kennedy," Osieck said.
"I had a chat with [Nagoya Grampus coach Dragan] Stojkavic and he agreed to let him play but right away we got a letter from the club denying the release. It's not a good situation and I don't accept it."
Osieck has named Kennedy in an expanded squad of 24, as well as four other Asian-based players, Matt McKay, Ryan McGowan, Robert Cornthwaite and Eric Paartalu.
"The foreign clubs created a lot of problems," said Osieck.
"I understand the games are not FIFA protected but there is a gentleman's agreement between the competing countries that players from the respective leagues should be released to play.
"If you host a tournament like this, for me it's a no brainer that players are released."
The remaining 19 players are from the A-League, with call-ups for Josh Brillante, Mitchell Duke, Craig Goodwin, Tomi Juric and Connor Pain, all of whom are uncapped.
Aside from Kennedy and McKay, the other players who would be considered regular Socceroos are Mark Milligan, Jade North and Archie Thompson.
Adelaide United custodian Eugene Galekovic is most likely to start in goal, with Nathan Coe and Mark Birighitti as back-ups.
The squad has just 211 caps of international experience between them.
Australia's first match is against the hosts on Saturday, followed by Japan on Thursday and China on Sunday.
The Socceroos squad is: Mark Birighitti (Gk) (Newcastle Jets), Joshua Brillante (Newcastle Jets), Nathan Coe (Gk) (Melbourne Victory), Robert Cornthwaite (Chunnam Dragons), Mitchell Duke (Central Coast Mariners), Ivan Franjic (Brisbane Roar), Eugene Galekovic (Gk) (Adelaide United), Craig Goodwin (Newcastle Jets), Tomi Juric (Western Sydney Wanderers), Josh Kennedy (Nagoya Grampus), Matt Mckay (Changchun Yatai FC), Ryan Mcgowan (Shandong Luneng Taishan), Mark Milligan (Melbourne Victory), Aaron Mooy (Western Sydney Wanderers), Mitch Nichols (Melbourne Victory), Jade North (Brisbane Roar), Connor Pain (Melbourne Victory), Erik Paartalu (Tianjin Teda), Trent Sainsbury (Central Coast Mariners), Adam Taggart Newcastle Jets), Archie Thompson (Melbourne Victory), Michael Thwaite (Perth Glory), Dario Vidosic (Adelaide United), Ruben Zadkovich (Newcastle Jets).