The 33 year-old defender left Real Madrid after a successful decade at the Bernebeu but still feels he can contribute at the highest level.
Salgado was at Ewood Park on Monday to discuss details of a free transfer before the new season starts.
However, Sam Allardcye has already signed a right back this summer in the form of Danish international Lars Jacobsen which could keep West Ham's hopes alive of luring the Spaniard, who has played 250 times for his country, to London.
Salgado said last week that it was a "privilege" to have worked with some of the best players in the world during his past decade.
"I have to thank my partners because it was a privilege to work at their side, to share the dressing room with the best (players) in the world," he said.
"I was to especially thank those who were close to me during these ten years: Raul, Iker, Guti and also Roberto Carlos, who is no longer with the team but who I shared many moments with, he is also the godfather of my daughter."
"It is going to be really difficult to wear the jersey of another team, but now when I go home I still feel I can play football for a few years more and enjoy something that is my life."
Real said that they and Salgado had "agreed to end their collaboration". The announcement followed news that the club have agreed to buy Spanish midfielder Xabi Alonso from Liverpool.
Salgado arrived at Real from Celta Vigo in 1999 and had a contract until 2011, but played little last season.