Remove the siding from the area around the rotten sill. With the siding removed it is easier to determine the amount of sill that has damage.
Crawl under the house or go down into the basement and support any floorboards that are supported by the sill with 4-foot-by-8-foot boards and foundation jacks. If there is no way to reach the interior of the wall then the exterior can be raised with four 6-ton hydraulic jacks. Remove the soffet or gutter to access the roofing beams. Place the jacks 3 feet apart and mount them on 2-foot-by-2-foot OSB to spread out the weight of the wall. Jack them up slowly and stop if you hear any popping or cracking.
Remove any loose wood from the foundation area and detach the sill from any framework.
Cut any foundation bolts that have not come loose on their own with a reciprocating saw.
Remove the section of damaged sill by cutting through it with the saw and removing it in small sections.
Lower the framing back onto the sill.
Replace the sill sections with new 2-foot-by-12-foot sections. Secure them in place with angle brackets and 3/8-inch lag screws. If your drill isn't strong enough to drive the screws into the foundation you may need to rent a pneumatic hammer from a local hardware or rental store.
Reattach the sill to any framing with a hammer and nails.
Replace the siding.