Dailey, the former University of San Francisco guard, has had a history of drug-related problems and, under NBA rules, came to the team and told them he would be re-entering a rehabilitation center.
The 6-3 guard is expected to miss the first two months of the season. He was expected to battle newly-acquired Kyle Macy for the team's starting guard spot opposite Michael Jordan.
"Quintin came to us and explained to us the problem," Krause said. "We want to do whatever we can to help him."
Dailey has been in the middle of controversy since being selected in the first round by Chicago in 1981. He was accused of assaulting a student nurse while at USF and later admitted to having sought drug rehabilitation in Baltimore.
Dailey also had missed a team flight and had unexcused absences several times during the past two seasons.