Allardyce admits his priority remains a new striker.
Speaking to the Lancashire Telegraph, he said: "Guti would be a player we would like to sign there is no doubt about that.
"It has been fronted by Michel Salgado and it has been outstanding that a player like that would like to come to Blackburn.
"But a player in his position is not the priority at the moment.
"One of the stumbling blocks for me is the priority is a frontman and I am not so sure Mr Guti could wait for us to find a front man and see where we go from there.
"But that is the key thing for us to sign a front man and then look elsewhere after that."