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Template matching is widely used for many applications in image and signal processing. This paper proposes a novel template matching algorithm, called algebraic template matching. Given a template and an input image, algebraic template matching efficiently calculates similarities between the template and the partial images of the input image, for various widths and heights. The partial image most similar to the template image is detected from the input image for any location, width, and height. In the proposed algorithm, a polynomial that approximates the template image is used to match the input image instead of the template image. The proposed algorithm is effective especially when the width and height of the template image differ from the partial image to be matched. An algorithm using the Legendre polynomial is proposed for efficient approximation of the template image. This algorithm not only reduces computational costs, but also improves the quality of the approximated image. It is shown theoretically and experimentally that the computational cost of the proposed algorithm is much smaller than the existing methods.