Penny, who developed into a key part of the Seahawks' offense in recent weeks, suffered the injury on his first play of the game against the Rams. Seattle head coach Pete Carroll labeled it a "significant knee injury."
"He has had a big impact the past few weeks and we've really liked his contribution, so you miss him," Carroll told reporters Monday. "A guy like that, you just don't replace it. You go to the next guy and he brings what he has.
"Unfortunately, we missed him [in Sunday's game] and we're going to miss him the rest of the season. I have been really excited about him turning the corner and really taking hold of this thing and contributing in a big way. C.J. [Prosise] will step into that role and [Travis] Homer will help out, and we'll see how those guys can do."
Penny went down in obvious pain on the Seahawks' first drive after taking a screen pass 16 yards. He spent most of his first season and a half playing behind Chris Carson but saw an increase in usage the last two games, playing 65 combined offensive snaps to Carson's 70.
In 10 games this season, Penny had 370 rushing yards and three touchdowns on 65 carries. He added eight receptions for 83 yards and a receiving score.
The Seahawks (10-3) will travel to play the Carolina Panthers (5-8) on Sunday.