The likely outcome now is the former England skipper will train with Spurs for a month.
"I don't think it's going to happen," Redknapp told Sky Sports News.
"I spoke with the chairman and I think there are big problems with insurance issues and everything.
"He got injured last year at Milan, I think there was issues there with insurance."
Redknapp says the former England captain is likely to arrive at White Hart Lane this week to begin a month's training with the north London club.
He said: "What's going to happen, David is welcome to come and train here for a month or so, which I think he would like to do and we're pleased to have him come and train.
"It will be nice to have him here training with us for a month and I think he'll be great to have around the place and he'll be a good influence on everybody and I look forward to him coming.
"But I think as far as playing goes it looks like it's a no-goer."