Mourinho, who previously managed Madrid between 2010 and 2013, is believed to be open to taking charge of the Spanish giants again this summer ahead of next season.
The Portuguese manager maintains a strong relationship with club president Florentino Pérez and is said to have impressed the board with his recent spell at Benfica.
The former Manchester United manager’s current contract with Benfica expires at the end of next season but includes a clause allowing him to leave this summer.
Madrid are said to be ready to snap him up in the coming months, a move that Shearer told Betfair would surprise him.
“I'd be really surprised if Jose Mourinho went back to Real Madrid. I don't know whether that's them putting feelers out to try and see the reaction. Whether that's from Mourinho's people, or whether that's from Real Madrid.
“Jose has still got a bit of magic. They're still unbeaten this season, Benfica. He'd go down rightly as a great. But I'd be really surprised if that was to happen, him going back to Real Madrid.”
Mourinho returned to manage Chelsea after he left Madrid 13 years ago. He could now make his way back to Madrid in a move that may push the side to be title contenders once more.