The Welsh Rugby Union's (WRU) senior player selection policy (SPSP) means only three players who play outside Wales can be picked.
Hadley thinks Taulupe Faletau, George North and Jamie Roberts will be the three wildcards.
"They'll leave Rhys Priestland out," said ex-dual-code international Hadley.
He feels the presence in Wales of Ospreys rivals Dan Biggar and Sam Davies plus Scarlets' Rhys Patchell and Gareth Anscombe leaves Priestland facing the end of his Test career.
"With the other outside halves in the pecking order at the moment you would probably think that was the end of it," Hadley said.
"You've got Sam Davies, Dan Biggar, Rhys Patchell - who is going to play a fair bit at 10 - and you've got Gareth Anscombe.
"Unless one of the others gets injured and cannot be picked then there's a possibility he [Priestland] becomes the third wildcard choice then."
Priestland, who joined Bath from Scarlets after the 2015 World Cup, announced in October 2015 that he was taking an 18-month break from playing for Wales.
But the 48-times capped player reversed his decision two months later and featured in all five games of the 2016 Six Nations and went on the summer tour to New Zealand.
Priestland is affected by a player selection policy is aimed at ensuring more players play their domestic rugby in Wales.
The WRU has revealed its seven-man list for the first time. Three wildcard selections are available for each Wales campaign during 2016-17.
Lock Dominic Day, flanker Nicky Thomas and scrum-half Rhodri Williams are the others affected while Bath lock Luke Charteris is exempt from the rule and free for selection.
The SPSP does not affect players who signed contracts with clubs outside Wales before the policy was introduced, such as Toulon's Leigh Halfpenny and Exeter's Tomas Francis.
"I just think the whole rule is ridiculous," Hadley told BBC Radio Wales Sport.
"They should just scrap it and (the coach) should be able to pick whatever players he wants to pick.
"For Wales you want to be playing your best players, whether they're playing in Wales or not
"You want to try and keep them in Wales if you can, but if you can't then surely you want them still playing for Wales."
Former Wales wing Adrian Hadley believes Bath fly-half Rhys Priestland will be the highest profile casualty of the "daft" so-called Gatland's Law.