"David has rejected the chance to play in England. It would be a nonsense to negotiate with Manchester City and Chelsea aren't interested," he told the Mirror
"If Valencia do decide to sell him he wants to stay in Spain."
Villa, who scored Spain's opener in their 2-0 victory over England earlier this month, now has a strike rate of 25 goals in 42 internationals.
While Spain rely on Villa, Valencia are even more dependent on the prolific forward, who has scored 18 out of their 43 league goals this season.
Villa was hot property in the summer after firing Spain to Euro 2008 glory – with the tabloids labelling him 'maravilla' which translates as 'wonder'.
After missing out on Manchester United winger Cristiano Ronaldo, Spanish champions Real offered a reported 45 million euros for him, but Valencia didn't want to do business and the striker signed a contract extension until 2014.
"The club wanted to keep me and I feel comfortable here so it is all fine," Villa explained at the time.
However, with presidential elections at the Bernabeu this summer, Villa could again be a target for Real come the end of the season.