The 62-year-old was the early bookies favourite to succeed Craig Shakespeare who was sacked this week.
Allardyce says he doesn’t feel the time is right for him to step back into club football.
The former Crystal Palace, Newcastle and Bolton chief is enjoying time out from the hustle and bustle of club management.
Allardyace told talkSPORT: "As big a club it is and as much as I would love to manage Leicester, I don't think it is time for me.
"I'm not ready. Having been in it so long and how I felt at the end of last season, I am enjoying my life too much.
"Yes, it would interest me and yes I would take the Leicester job - but not at this time."
However, he didn’t rule out taking over another national team, with the possibility of an offer from the USA having some appeal.
Allardyce added: "If I ever go back into football, an international position again might be of interest to me. Whether that is the USA, who knows?
"If we got to that stage where we there was an interview, you would assess whether you have a chance of being successful with that national side and, if you do, is that a better challenge for me at this stage of my life?"
