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Neymar injured his back in the final minutes of Brazil's quarterfinal victory against Colombia and it was confirmed that he will sit out the rest of the tournament after damaging his vertebra.
Bastian Schweinsteiger lamented the Barcelona forward's injury, claiming Germany want to face the strongest opponents possible.
Khedira, who only returned to action in May after missing the majority of the season through injury, told Welt am Sonntag: "We want to compete with the best, and Neymar is one of the best.
"We are anything but happy to hear about the news. It's bad news for us and every single football fan, especially the Brazilians. We want to compete with the best, and Neymar belongs to the best.
"I feel really sorry for him that he can't play against us, and is no longer able to participate in the World Cup at all. He is a great footballer.
"Now we all must take on the challenge and try and make it to the final against a changed Brazil XI.
"It's a semifinal at the World Cup, and everything's at stake anyway. Brazil will still field a team that will stretch us to the limit."
Neuer told kicker that Brazil's dynamic will shift following Neymar's injury but that they will be no less dangerous.
"Without Neymar they will spread their match on many shoulders. Until now, everything was focused on him. He is the star. Now the team is the star," he said.
"It will be down to many factors, Brazil are fired up and so are we. It will be important to bring through our match, and moreover that this match is officiated by a good referee, because of the atmosphere, and the tough duels."
FIFA have appointed referee Marco Rodriguez, who made the headlines for missing Luis Suarez' bite in the Uruguay victory over Italy during the group stages, and also sent off Italy's Claudio Marschisio that day.
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