The Hornets said he will be re-evaluated after the All-Star break.
The diagnosis was revealed by an MRI exam that was scheduled after Kidd-Gilchrist left in the third quarter of Wednesday night's game with what the team called a dislocated shoulder.
He has been limited to seven games this season since having surgery on the shoulder. He was averaging 12.7 points, 6.4 rebounds and 1.3 assists.
The 6-foot-7 Kidd-Gilchrist had surgery for a torn labrum in his right shoulder on Oct. 6, months after he agreed to a $55 million contract extension. He was injured in the team's first preseason game at Orlando on Oct. 3 when he landed awkwardly on the shoulder.
The Associated Press contributed to this report.