Best to exclude retracted trials and state the reason why you have done so in your PRISMA flow chart (if that's what you're using) to account for the difference in your search results and considered for inclusion after title/abstract sift
Agreed. We usually identify articles like this as "Excluded following full-text review" and describe the reason for exclusion in the PRISMA diagram. It is not uncommon to mention these retracted studies in the discussion section of the manuscript (since you have already extracted the data and can see how the retracted studies compare to the results of the included studies). If the retracted manuscript was a major cornerstone publication, it may have shaped the research design and hypotheses of subsequent research before it was retracted, and, as a result, potentially influenced the conclusions of many of the researchers included in your systematic review. Might be worth a mention.