An arbitration hearing in London upheld the International Tennis Federation's principle players should no longer be able to play for more than one country.
Bedene became a British citizen in March 2015, but represented Slovenia in three Davis Cup ties before the switch.
The ITF rule was introduced with barely three months' notice on 1 January 2015.
That was after Bedene had lodged his passport application.
Charles Hollander QC concluded the ITF was not obliged to grant Bedene an exemption, but expressed the "greatest sympathy" for his predicament.
"The ITF change in rules has come at precisely the wrong time for him," Hollander states in his ruling.
"Bedene cannot be characterised as one of those players who desire to adopt a 'flag of convenience'. To make matters worse, the Slovenian Tennis Association have not taken kindly to his defection."
The 27-year-old has fallen to 104 in the world rankings and revealed at the Australian Open that he came close to quitting the sport last year.
The ITF's board of directors rejected Bedene's appeal against the ruling last March but agreed to take the matter to arbitration after some intense diplomacy by the Lawn Tennis Association.
Bedene must now decide whether he wants to continue his challenge to the rule.
He has been given plenty of encouragement by Hollander, who says he hopes "the passage of time will be sufficient to persuade the ITF that Mr Bedene is a worthy candidate for an exemption".
The ITF has said it sees "no reason in principle why a further application should not be made".
Aljaz Bedene's latest attempt to overturn his ban from representing Great Britain in the Davis Cup has been rejected.