The Spaniard's contract with Newcastle ends in June and past disagreements with club owner Mike Ashley over transfer strategy frustrated him enough to consider his future at the Tyneside club earlier this season.
"I have been trying to win titles everywhere, in different countries. We have to have a team who can compete," the 58-year-old former Liverpool, Inter Milan and Real Madrid manager told Sky Sports.
"This city, the club has potential. It's massive. I'm not looking to spend 200 million pounds ($261 million), but doing the right things.
"You can do everything right with your tactics but the other team has one player that can make the difference. You would have to pay 30 million pounds to buy a Leicester player."
Paraguay forward Miguel Almiron became Newcastle's record signing in January in a deal that British media reported was worth around 21 million pounds.
Victory against Brendan Rodgers's side lifted Newcastle to 13th in the table with 38 points from 34 games. They host Southampton in their next match next Saturday.
(Reporting by Shrivathsa Sridhar in Bengaluru; editing by Clare Fallon)
