Benitez admitted that he has a long-held affinity for the Spanish club and their supporters, but stopped short of saying he actually wanted the job in summer (via ESPN):
I have a link with the fans and they have treated me well. I arrived at Real Madrid when I was 13-years-old and I'm from Madrid, but I don't want to get involved in this speculation because my words aren't always interpreted.
I have a contract (with Chelsea) until the end of the season and I am going to do everything possible for this club to have the best success.
Benitez is likely to eventually end up as Real Madrid boss sooner or later, but from the point of view of both club and manager, it might be better if it wasn't just yet.
In the early-to-mid 2000s, Jose Mourinho and Rafael Benitez were two of the most coveted, impressive and innovative coaches in Europe, in demand from the biggest sides on the continent and securing success at home and abroad with their respective clubs.
Both made the move to England and the Premier League in 2004, with Mourinho joining Chelsea and Benitez moving to Liverpool.
From there, the legend continued to grow for both men, loved by their respective clubs' fans and bringing in significant glory in the form of silverware to both teams.
Fast forward a decade, and both currently occupy managerial positions where they are not wanted.
Rafa is now in charge of Mourinho's former club Chelsea, where he is vilified, and even hated, for his past connections and successes with Liverpool.
Mourinho is at Real Madrid, where after an initial period of serious love between fans and manager after he wrestled La Liga title from Barcelona, the notoriously impatient Real fans have quickly turned on him as both Barça and city rivals Atletico Madrid lay above them in the table this season.
Perhaps both men need a change of scenery, but from Benitez's point of view, perhaps he could do with finding a job where he is actually allowed to manage properly, not on an interim basis, and display his talents to do what he does best—winning things—before taking a crack at the Real job.
After all, it is only likely to last a couple of seasons at most; he might as well go into the job in form and confident rather than off the back of a couple of less-than-successful roles.
During his time at Liverpool in particular, Benitez was known as a boss who knew what he wanted and would do whatever it took to gain a huge measure of control over the team.
Signings, tactics, team sheets and training sessions, Benitez was in charge of the whole lot. Having proved himself as the man to take the club forward he also helped overhaul the youth academy setup, having significant input to matters far beyond the senior team level.
He left Valencia in part for that reason; when new signings were required, he wasn't able to have enough control over matters such as deciding exactly which players would come to the club.
Would he really get that level of autonomy at Real Madrid?
Certainly not initially, and quite possibly not at all.
At the very least, Benitez would want an input into which players joined the club and which ones left. Real Madrid isn't exactly a club renowned for letting the head coach have that level of control over off-pitch matters.
2003: Jose Mourinho wins the UEFA Cup with Porto.
2004: Rafa Benitez wins the UEFA Cup with Valencia. Mourinho wins the Champions League with Porto.
2005: Benitez wins the Champions League with Liverpool. Benitez makes the League Cup final with the Reds, but Mourinho wins the final with Chelsea.
Rafa worked wonders bringing trophy successes to his team, but he was, early on, always a year behind Mourinho. Not that there was anything particularly down-heartening about that, of course. But it did indicate an early pattern.
Then there are the jobs.
Mourinho took over at Chelsea, then went to Inter Milan, and now is at Real Madrid.
Rafa went to Liverpool, from there replaced Mourinho at Inter, albeit briefly, and his next job was at Stamford Bridge in charge of Mourinho's "English side"...and now he's linked with a move to Real Madrid.
The links with the Spanish club for the Spanish boss are both long-standing and obvious; he was perpetually said to be on Real's wanted list while he was at Liverpool and has already worked for the club beforehand in a number of roles.
Perhaps, though, the time is right for Rafa to stop following in Jose Mourinho's already-trodden path, take a different career direction and come to Real Madrid naturally when he is once again in demand, rather than because Real need to dispense with their manager and find a safe-seeming quick fix.
It's a fact of life that managers and players both come and go, but some players stick around for longer than others.
Managers tend not to be afforded that luxury; when things aren't going well it's they who are inevitably moved along rather than the playing staff.
Sergio Ramos and Iker Casillas have spent considerable time at Real Madrid and wield considerable influence around the club, so much so that they were said to have demanded Mourinho's sacking at the end of the present season—claims which the duo strenuously deny (via BBC).
There may or may not be truth in the reports, but what is undeniable is that there is a strong clique of players at Real Madrid with big egos, and if they dislike a manager or his methods then there is precious little the coach can do to turn around form and get the players playing for him again.
Benitez is notoriously distant from his playing staff, preferring a largely professional relationship, and is very demanding in his tactical and preparatory work from the players.
He'll need them all onside if he is to be a success, whichever job he takes, and perhaps especially so at Real Madrid—whenever it is that he joins them.