Simpson-Daniel, 26, was the Guinness Premiership player of the season last year but he has been restricted to winning just 10 England caps in six years by a catalogue of injuries and illness.
He has been in prime form this season, scoring three tries in six matches for Gloucester, and was a strong favourite to start on the opposite wing to Paul Sackey against the Pacific Islands.
But he suffered an isolated rupture in his right ankle during Gloucester's Heineken Cup defeat against the Cardiff Blues at the Millennium Stadium last Sunday.
Simpson-Daniel had an MRI scan on Tuesday and, after a consultation with foot and ankle specialist James Calder, was ruled out of action until the new year.
With a projected rehab time of 12 weeks, he is also unlikely to be in contention for the start of the RBS 6 Nations Championship in February.
Simpson-Daniel exploded onto the international stage in 2002 when he scored an audacious try for an England XV against the Barbarians, leaving Jonah Lomu standing.
But his Test career has been blighted by a succession of injuries to his back, ankle and collarbone while he has also suffered glandular fever.
On the tour of Australia in 2006, he was hospitalised and missed both Tests after developing a dangerous blood clot from a dead leg.
Johnson said: "On behalf of the squad my thoughts are with James. The coaching and medical teams from Gloucester and England will be in regular contact with him during his recovery and rehabilitation.
"I won't be making a decision on a replacement for James until tomorrow."
England are also monitoring the fitness of Sale full-back Mathew Tait and Gloucester number eight Luke Narraway, who have both suffered hamstring injuries.
Earlier this week, Johnson replaced injured duo Lewis Moody and Jonny Wilkinson in the elite squad with Michael Lipman and Danny Cipriani.
Bath's Nick Abendanon was also drafted into the squad in place of Tom Varndell, who is short of match practice after falling out of favour at Leicester.
Harlequins winger David Strettle may have been next in line to replace Simpson-Daniel but he is recovering from a a broken metatarsal.
Johnson's other wing options in the England Saxons are Topsy Ojo, who made his Test debut in New Zealand during the summer, Ugo Monye and Matt Banahan, while Mike Brown could provide additional full-back cover.
England may turn to Simpson-Daniel's Gloucester team-mate Olly Morgan, who could technically be fast-tracked from outside the England fold into the senior squad.
Gloucester's head coach Dean Ryan admitted losing Simpson-Daniel until the new year was "a massive blow" to the club.
Ryan added: "He is an outstanding player and central to our attacking threat. Considering the other injuries we have across our backline this could not have come at a worse time for us."
England open their autumn schedule against the Pacific Islands at Twickenham on November 8 before tackling Australia, South Africa and New Zealand.