Nzonzi has handed in a transfer request, just as he did at Blackburn before joining Stoke last summer.
Coates told The Sentinel: "Mark Hughes will decide on that situation, but he is our player and is under contract.
"There haven't been offers that I am aware of, but we wouldn't stand in his way if Real Madrid or a club of a similar standing came in for him.
"He has said he has designs to play at the highest level. He needs to play well to attract these clubs and I hope he does. He is a good player and the ball is in Mark Hughes's court."