The Swedish international is in the final year of his current deal and negotiations over a new deal started more than a year ago.
But all attempts to persuade former Arsenal player Larsson to commit his future to Blues have so far drawn a blank.
Under offer: McLeish is hopeful Larsson will sign a new contract
McLeish said: 'There is nothing doing at the moment with Seb's contract.
'We were hopeful we could get something done but it is up to Seb. He is now in a good position for himself if he wants to become a Bosman.
'But we will keep trying to entice him.'
Larsson has been back to his best in recent games with his pinpoint crosses, although no-one could take advantage during Saturday's goalless draw with Wigan at St Andrew's.
McLeish said: 'I think he had a great game on Saturday. His delivery from the wide area was great. Seb doesn't have to beat a man. He can get the ball around an opponent with his terrific curl on the ball.
'We are just desperate for someone to get on the end of those quality crosses.'
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