Former Algerian president and revolutionary leader Ahmed Ben Bella, one of the world's most prominent political prisoners, has been freed after 14 years of house arrest, the official Algerian news agency reported yesterday.

Ben Bella, 61, a leader of Algeria's bloody fight for independence from France, had been under arrest -- but never charged or tried -- since he was overthown in 1965 by his defense minister, Houari Boumediene.

Baumediene's death in December and the sureness with which his successor, President Chadli Benjedid, assumed control of the country, appeared to have cleared the way for Ben Bella's release.

Benjedid, a military leader, has instituted a middle-of-the-road government for Algeria that has brought a mood of calm to a country that, under Bel Bella and Boumediene, gained a reputation for radical revolutionary ardor.

U.S. analysts said yesterday that Ben Bella's release was significant in that it indicates clearly that Benjedid, after only five months in office, "feels confident and in a position of strength."

While Ben Bella still has a broad personal following in Algeria, it is not considered likely that he will attempt to play a political role.

A month ago Benjedid freed several others who had been jailed at the time of Ben Bella's overthrow, leaving only the former president in detention.

The official announcement gave no details of Ben Bella's release except to say it was being granted on the occasion of Algeria's independence day, celebrated July 5.

Agence France-Presse quoted sources in Algiers as saying that the former president was in a good physical condition and his morale was good.

Throughout his years of detention, numerous friends from the early days of the Third World movement -- especially Yugoslavia's Tito and Cuba's Fidel Castro -- had interceded with Algerian leaders for Ben Bella's release.

Ben Bella's who had been jailed for eight years by the French for revolutionary activities when Algeria was a French colony, became prime minister and then president at the time of Algeria's independence in 1962.

Three years later, almost on the eve of a major Afro-Asian summit conference scheduled for Algiers that was to bring Ben Bella's world prestige to a peak, Boumediene seized control of the government.

Ben Bella was arrested in his bed at 2 a.m. and reportedly held in a cellar for several months before being allowed to live under house arrest.

Boumediene described Ben Bella's situation as "surveillance" rather than imprisonment and said, in 1975, "he has always had everything he need to make him comfortable. I consider that he no longer has a role to play in Algerian political life."

His detention conditions improved over the years. Eight years ago he was permitted to marry Zohra Sellami, an Algerian journalist.

In recent months he reportedly had been living, with his wife and two adopted children, in two rooms in a heavily guarded house in a village 15 miles from Algiers, with visitors restricted to close relatives. CAPTION: Picture, AHMED BEN BELLA . . . before his overthrow