Souness - who managed Rovers between 2000 and 2004 - has been installed as a firm favourite to replace Steve Cotterill after his departure from Turf Moor.
However, the Scot still holds a deep affinity for Blackburn having won the League Cup during his time at Ewood Park, and as a result will not consider taking the Championship job.
"That would be an impossible job for me to do because of my Blackburn connections," Souness told the Lancashire Evening Telegraph.
"I've been linked with a lot of jobs recently but I'm busy with other things.
Unless something really excites me, I won't be making a comeback."