The former Valencia star - who penned a five-year deal in the summer of 2003 - has been training hard, but Southgate has made it clear the 33-year-old will not be in his thoughts.
"At this moment in time I don't see him being involved with the first team," Southgate told the Evening Gazette.
"His attitude to training is fantastic and his training has been brilliant.
"But I've discussed his situation with him and I have my views on the strengths and weaknesses of every player.
"We have a need to look towards younger players and for quite a while now we have been trying to negotiate with Mendi so that he is able to move on. I think it's important from his perspective and for his career to move on."