"No question that he straight away could have walked into any side in world cricket at that time, but having seen him he's still rusty and he's still a bit slow."
Yuvraj has scored 60 runs in four T20I matches, and taken four wickets since his return.
Shastri said Virender Sehwag should be picked against Pakistan at the expense of Yuvraj.
"If you go in with three fast bowlers and two spinners, then you have to think about your batting line-up and if Sehwag has to come - which I think he should - then who do you drop in that middle order, and one batsman that comes up is Yuvraj Singh.
"It's not the question of what Yuvraj Singh can do but what is his current state of mind after what he has done and you have to respect that. You can't be too greedy and ask too much from that body that quickly."
Shastri also talked up the impact Sehwag could have on the Pakistan match.