The accomplished lyricist said it was "moronic" to changing "Children of Israel" to "Children of Kindness in the song Close Every Door.
He was quoted by The Telegraph as saying: "Joseph is an innocent story straight from the Bible and these people in New Zealand thought we were making statements about Israel and Palestine - bonkers."
Words from the original version of the song include: "Children of Israel are never alone [...] for we have been promised a land of our own".
Sir Tim Rice, who worked on the show with Lord Andrew Lloyd Webber, addressed the matter at the Chalke Valley History Festival in Wiltshire.
He explained he only learned about the lyrical alteration - made by a group of schools in New Zealand - via Twitter and claimed it was an attempt to be "politically correct or something".
He said: "I said I did not approve it and I hadn't heard about it. It was quite a big thing, it was for all schools in the Wellington area in New Zealand."
"We came down on them like a ton of bricks and they said [...] we wanted to make it easier for the children. I thought the point of teaching was to teach children to cope with hard things in life. This was moronic."
The teacher had been involved in a production of the musical planned for an arts festival in New Zealand in September.
An apology has since been issued by the local council in the area.
The coordinator of the festival said: "Action has been taken over the weekend to ensure that the original song words are all reinstated, with immediate effect."