McFadden was injured some time in the second half and limped off the field after getting flipped in the air after being hit. He finished the game with minus-3 yards rushing.
Head coach Tom Cable announced McFadden's injury at his weekly Monday press conference and said he hadn't yet thought about what to do without the second-year running back.
"We'll have (Justin) Fargas and (Michael) Bush and go with the two of them," Cable said. "We all are (disappointed) but that's this game. It's going to do that to you once in a while, so you have to be ready for it, prepared and handle it when it happens."
Surgery is scheduled for Tuesday morning.
Fargas, who led the Raiders in rushing each of the last three seasons, has played sparingly this year because Oakland wanted to focus the offense more around McFadden and Bush.
Fargas had 24 yards rushing against Houston to lead all Oakland running backs but he was tackled in the end zone for a safety. Bush managed just 10 yards on three carries.
McFadden tears meniscus in knee
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