The young right back will not be playing in the Europa League expanded group stage matches.
Spurs submitted a team of 23 for the competition, as they did not have enough club homegrown players to justify UEFA requirements.
“He’s disappointed”, Postecoglou said of Spence.
“It was always going to be a difficult decision with the make-up of our squad currently. With the lack of club-trained players, we were always going to have to leave somebody out.
“Djed was the unfortunate one. But, at the same time, Djed has already played in the Premier League, and if you asked him at the start of the season where he sees himself, I think the fact he’s part of our squad and will play a huge part in our year as he has already, I don’t think he should take too much disappointment.
“Obviously, everyone wants to play, but in the end it was about team balance for us. We just feel that with the squad we’ve got, we’ve got some cover on the right side, some players that can cover on the left side.”
The Tottenham head coach added: “I always tend to go for more attacking players in those scenarios. So Djed misses out, but as I say he’s already played a couple of games in the Premier League and there will be plenty of football for him if he keeps going like he is.”