Head coach Steve Clarke had to trim his group from 28 names down to 26 with the pair not making the cut after Friday's draw with Finland.
Gordon, 41, featured in the friendly at Hampden Park coming off the bench to make his 75th cap after an injury-hit campaign which restricted him to just seven appearances for Hearts.
"I like a balanced squad, I've picked a balanced squad. I wasn't going to take four goalkeepers," Clarke said.
"It was a really tough decision to leave Craig out. When you think of the injury he's come back from, I just felt over the period of time he'd been back, he hadn't become the number one at Hearts again. Only seven games from December 2022 is a long time.
"It was a really tough conversation with Craig, quite emotional to be honest for both of us."
Central defender Souttar has also had his own fitness issues, missing Rangers' final three games of the season.
"Also emotional," Clarke said of his decision to exclude Souttar.
"It's really difficult for you people to imagine sitting down with people who have always given their best for their country when I've selected them.
"I think they understand how difficult it is for me and I really understand how difficult it is for them. Very professional, both guys."
Before the trimming, forwards Lyndon Dykes and Ben Doak were also forced to withdraw from the squad due to injury. They have since been replaced by Tommy Conway and Lewis Morgan.
Scotland help kick off Euro 2024 against hosts Germany in the tournament opener in Munich on June 14th.
Scotland's Euro 2024 squad:
Goalkeepers: Zander Clark (Hearts), Angus Gunn (Norwich), Liam Kelly (Motherwell)
Defenders: Liam Cooper (Leeds), Grant Hanley (Norwich), Jack Hendry (Al Ettifaq), Ross McCrorie (Bristol City), Scott McKenna (FC Copenhagen), Ryan Porteous (Watford), Anthony Ralston (Celtic), Andy Robertson (Liverpool), Greg Taylor (Celtic), Kieran Tierney (Real Sociedad)
Midfielders: Stuart Armstrong (Southampton), Ryan Christie (Bournemouth), Billy Gilmour (Brighton), Ryan Jack (free agent), Kenny McLean (Norwich), John McGinn (Aston Villa), Callum McGregor (Celtic), Scott McTominay (Manchester United)
Forwards: Che Adams (Southampton), Tommy Conway (Bristol City), James Forrest (Celtic), Lewis Morgan (New York Red Bulls), Lawrence Shankland (Hearts)
