The move moves the Raiders one step closer toward getting down to the 53-man regular-season limit by the Saturday deadline. Oakland still needs to trim 21 players from its roster.
''There's decisions that have to be made and we'll make them,'' Shell said. ''We have to work to get it done.''
Hamilton spent two years in Oakland after winning two Super Bowls with New England. The 35-year-old Hamilton had 102 tackles and 2 1/2 sacks while starting 28 games for the Raiders.
The offseason acquisition of veteran pass-rusher Lance Johnstone and the move to full-time defensive end by Tyler Brayton appeared to make Hamilton expendable. Hamilton spent most of training camp playing with Oakland's second-team defense.
Shell also pointed out defensive end Kevin Huntley as one of the few players who performed well during the loss to the Seahawks on Friday, the Raiders' first defeat of the preseason.
''There were a couple of guys hustling and working hard,'' Shell said. ''But there's enough there that we know we've got some work to get done before we open against San Diego.''
In other team news, Shell said an MRI taken on quarterback Andrew Walter's knee showed no significant damage. Walter was injured while scrambling out of the pocket when he was drilled by a Seattle defender.
''Everything seems to be OK,'' Shell said. ''There were no structural problems. He walked around and told the trainer, 'I'm fine, I'm fine. He went back out and played but we still had to check it.''