The 26-year-old former England Under-21 international has been a bit-part player at Fratton Park this season, with Niko Kranjcar the regular starter on the left side of midfield.
Redknapp told The News: "Niko has been playing so well that it's been difficult for Matty.
"I understand his position. If he's unhappy and someone made a good offer then we wouldn't stand in his way.
"I don't want to lose him. I like him very much. He's a good pro, he's done a terrific job for this club, but I'm not going to keep a player who wants to go.
"I understand exactly how Matty feels not being in the team at the moment. He's a good lad who trains hard and shows a fantastic attitude.
"If he was happy not playing and content messing around in the reserves then I wouldn't be happy with him. In fact if someone was happy with that, then I'd not consider playing them at all.
"I understand what Matty is saying. If he wants to move and it's a good offer then I wouldn't stop him, but it would have to take a good offer."