Celtic kept their Champions League place after Uefa confirmed yesterday its decision to reject the appeal.
Legia had appealed the severity of their punishment for fielding an ineligible player, Bartosz Bereszynski, in the second leg of their third qualifying round clash against Celtic.
But Celtic legend Frank has claimed the punishment is "unfair" - and could result in the Poles losing the massive financial boost that comes with playing successfully in Europe.
He said: "To make such a small mistake and to then be punished with potentially losing £20million - that's unfair.
"I can understand it is a big financial boost for Celtic if they get into the Champions League but my heart goes out to Legia Warsaw fans.
"They came out to see their team win 6-1, and they are being punished for it."
Lisbon Lion Bertie Auld said Celtic had now been given a chance - and they must "right what they've been doing wrong".
Ronny Deila's side will now face Slovenian champions Maribor for a place in the Champions League group stage.
Bertie said: "This wasn't an achievement because the other team won but now we have been given a clear opportunity to right what we've been doing wrong.
"Now we need to bring in the quality football to get to a higher level of the competition. Not just for Europe but for the Scottish league."
The verdict was confirmed in a Uefa statement which read: "The Uefa Appeals Body met yesterday following an appeal by Legia Warszawa against the decision taken by the Uefa Control, Ethics and Disciplinary Body on August 8.
"The appeal lodged by the Polish club was rejected and, therefore, the original decision of the Uefa Control, Ethics and Disciplinary Body is confirmed."
After the decision, club owner Dariusz Mioduski wrote on Twitter: "Unfortunately for now football is not winning... We are going to CAS."
Legia president Boguslaw Lesnodorski echoed the pledge to take the matter to the Court of Arbitration for Sport.
He wrote on Twitter: "Negative decision, it's hard even to comment, we are using the CAS and otherwise we are focused only on the games."
A statement released through the club's official website stressed Legia's determination to keep fighting for Champions League reinstatement.
The statement read: "Till the last moment we hoped that the spirit of sport wins, we find the decision extremely unfair.
"However we expected that decision and were prepared for it. We are to appeal to the CAS promptly.
"We will use the full appeal procedure, in order to get back our result that was fairly gained on the pitch.
"We will certainly fully subordinate to the final verdict. But I still hope that football will win, as well as the values it is based on: fair-play and respect to the on-the-pitch result."