Ineligible female included in squad (5)
I believe the answer is:
unfit
'ineligible' is the definition.
(both can mean unsuitable)
'female included in squad' is the wordplay.
'female' becomes 'f' (abbreviation).
'included in' means one lot of letters goes inside another.
'squad' becomes 'unit' (both can mean a group of soldiers).
'f' going within 'unit' is 'UNFIT'.
(Other definitions for unfit that I've seen before include "Ill-suited" , "Not prepared" , "Incompetent" , "Not in good physical shape (5)" , "Inappropriate" .)