Souness was the bookmakers' favourite after Tuesday's sacking of Paul Ince.
"I'm afraid you are talking to the wrong man. I don't know anything and have had no contact at all from Blackburn Rovers," Souness told the Telegraph.
"It doesn't surprise me to see my name in there but I'm not your man, I can definitely say that."
Blackburn lost their last six league fixtures under Ince, who was in charge at Ewood Park for six months.
The Telegraph said chairman John Williams knew who he wanted to replace Ince, with former Bolton Wanderers and Newcastle United manager Sam Allardyce emerging as the new favourite.
"I do have an idea of who I want to come in and we will be working to try and make that happen over the next couple of days," Williams was quoted as saying.
"Hopefully we will have someone in by the weekend but there are no guarantees, we have to make sure we get the right man now.
"You can't underestimate how much of a boost a physical presence could have on Saturday for what is an absolutely mammoth game."
Second from bottom Blackburn host fellow strugglers Stoke City on Saturday.
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