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Japanese official Yuichi Nishimura awarded Brazil a dubious spot-kick with the scoreline at 1-1 in São Paulo and hosts Brazil went on to win 3-1.
Fred won the penalty after going down despite being barely touched by Southampton centre-back Dejan Lovren.
Croatia players surround Yuichi Nishimura after his controversial decision
Kovač said afterwards: "I don't think anybody, anywhere in the stadium, saw this as a penalty. If you continue like this you will have 100 penalties. I think 2.5billion people watching on TV saw this was not a penalty.
"This was ridiculous and if we continue in this way we will have a circus. Fred is an 85kg man and I don't believe he can be brought to the ground in such a manner.
"I cannot blame Fred at all - everyone tries it on. Like it or not, this is part and parcel of football. What I want is for referees to stick to the laws of the game and apply them equally to both teams."
Croatia had opened the scoring courtesy of an own goal by Marcelo, but Neymar equalised and then despatched the penalty, with Oscar getting a third late on.