Houllier has been linked with a director's role at St Andrews, but Vignal, who played for his fellow Frenchman at Liverpool, believes he would prefer a return to Anfield.
Vignal said: "I'm sure he would want to come back to English football.
"He loves it so much but I think Gerard has a dream to come back to Liverpool because he won everything there but the title.
"He built everything there. He got a new training ground, brought on players like Carragher and Stevie G. So I'm sure he's looking at that.
"Here, at Birmingham, I don't think so, no. Everybody is happy with the gaffer here, he is doing a good job."