Rudolph, a preseason All-America candidate, had been battling hamstring issues since preseason camp. In Saturday's win against Pittsburgh, Rudolph's hamstring muscles tore off the bone as he tried to play through the injury, Kelly said.
His recovery could take six months.
"I kind of went in with a positive mindset to my MRI. We were expecting to get all good results and then go get an ultrasound and take a week off and go from there," Rudolph said Tuesday after the Irish practiced.
"To come back and get that news was a little shocking. "
Kelly said Rudolph will have surgery in the next few days.
"Right now, he and his family are putting together really, the doctor, who's going to do the surgery, the rehab, all of those things," Kelly said.
There was no indication going into Saturday that Rudolph could suffer such a major injury.
"He felt very good before the game," Kelly said. "The exertion obviously caused the injury."
Rudolph, a junior, was a John Mackey Award semifinalist last season. He has 28 catches for 328 yards and three touchdowns this year.
Kelly said he spoke to Rudolph Tuesday morning but did not discuss whether or not the Cincinnati product will return for his senior season. Rudolph said he hasn't had time to even think about the future beyond his surgery.
"The last 24 to 48 hours has been crazy with getting the MRI and getting the results," he said. "The surgery right now is important."
Rudolph said he initially hurt the hamstring during summer one-on-one drills. It appeared that he'd recovered when he hooked up with Dayne Crist on the 95-yard TD in the second game of the season.
"I'd be lying if I told you I wasn't worried when I was running," Rudolph said. "Looking back it would be interesting to see how fast I would have run with two good legs."
He wasn't sure which play he was hurt on Saturday but it came late in the game before he was taken out. And he added he had no regrets playing this season, even if his hamstring wasn't completely healed.
"In all actuality it was my decision to go when I did and to go as hard as I did," he said.
Kelly said the team's medical and training staff was steadfast in monitoring Rudolph's previous hamstring problems.
"It was a Sunday conversation, literally with our training staff and doctors. It was a daily interaction we had with Kyle," Kelly said. "Just one of those unfortunate things that occurs in a sport like this, and this is an injury that's unfortunately is becoming a lot more common because of the explosiveness of these young men."
It's been a frustrating experience for Rudolph because the injury lingered for so long and now instead of playing, he'll have to advise his teammates from the sidelines once he recovers from the surgery.
"It's something for a while now that's been bothering me and it's to a point where I have to fix it," he said.
Rudolph, from Cincinnati, missed two games last year with a shoulder injury. He had surgery on the shoulder during the offseason and was limited during spring drills.
But he showed the ability to get open this season and his good hands and ability to run with the ball after the catch gave the spread offense and quarterback Crist another option -- even though he had only one catch each in games against Stanford and Boston College.
"Well, certainly, you lose one of the best tight ends in the country, that's a loss," Kelly said. "But, you know, not one player is going to stop what we do."
"Those guys have to step up and play the position for us at a high level," Kelly said. "I'm very confident in them."
Eifert is battling a tendon injury in his shoulder and Ragone missed a good portion of fall camp with a variety of illnesses.
"You don't really fill his shoes," Eifert said. "There's only one Kyle Rudolph. I'll do what I do and take care of my responsibilities."
Information from ESPN.com's Brian Bennett, ESPNChicago.com's Wes Morgan and The Associated Press contributed to this report.