Simpson-Daniel, who has 10 England caps and has scored three tries in six appearances for Gloucester this season, sustained an isolated rupture in his right ankle at the Millennium Stadium.
He was voted the Guinness Premiership player of the year last season.
Gloucester's head coach Dean Ryan said: "To lose a player of James's quality is obviously a massive blow to us.
"He is an outstanding player and central to our attacking threat. Considering the other injuries we have across our backline this could not have come at a worse time for us. Naturally, he will get all the support he needs in his recovery process."
England Team Manager, Martin Johnson said: "On behalf of the squad my thoughts are with James. The coaching and medical teams from Gloucester and England will be in regular contact with him during his recovery and rehabilitation.
"I won't be making a decision on a replacement for James until tomorrow."