Khairallah was born in Tikrit in 1940, the son of Khairallah Talfah, an Arab nationalist officer in the Iraqi Army who was later involved in the 1941 Iraqi coup d'état and the ensuing Anglo-Iraqi War. His father was also the maternal uncle of Saddam Hussein, who would later marry Khairallah's sister, Sajida Talfah. Khairallah attended the Baghdad Military College and the Staff College, and later graduated with a degree from the Baghdad University School of Law and Politics in 1975.