Andretti were given the green light by the FIA late last year to become the potential 11th team on the grid, subject to FOM approval as they assessed the commercial viability of having another team in the sport.
The team had been getting their operations under way in preparations for their entry, with them even holding talks with former Alpine team principal Otmar Szafnauer over a potential move to the team.
But after months of reviewing the findings by the FIA, FOM decided to reject Andretti’s entry at the final step.
Speaking with Sky Sports F1, Brundle described the situation as ‘peak F1’ and explained the reasons behind the sport turning down the American team.
“This is going to run for a good while. A really punchy line says that this would do more for the Andretti brand than it would for Formula One,” he said.
"There's a lot of logistics to getting extra team in the pit lane and around the world for what is it a 24 race calendar this year. It's not just as easy like, 'Well, yeah, let's just put two more cars on the grid'. We've got to get them on the grid, have a garage, have a pit lane big enough, and so on and so forth.
“This is peak F1 we're in here and the teams no doubt will be saying 'Hang on a minute. Many of us have poured billions to get Formula One where it is now to our team and demand all over the world for races, fans tickets grandstands have sold out, you can't just come and join our club now, when everything's going so well. You're going to have to show us what you can bring to the table'.
”F1 have clearly said today, you're not bringing enough to make it work and warrant an extra team on the grid.”