The 35-year-old admits he is flattered by reports linking him with a move to the Spanish capital but insists he is focused on staying at Tottenham for another season
With the 50-year-old reportedly set to leave the Spanish capital at the end of the season, Villas-Boas has been among those linked with a move to the Santiago Bernabeu.
But the Portuguese boss, who has yet to spend more than a single season at any one club, has reaffirmed his desire to stay at White Hart Lane.
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"I have a contract. I was given an opportunity and was extremely grateful.
"The speculation about Real Madrid comes from the coach having speculation all over the world about his exit - Real Madrid are looking for a coach and the coach there is under a contract."
Villas-Boas, who is attempting to guide Tottenham to a place in next season's Champions League, admits he is flattered to be linked with the role at Real Madrid but maintains he is concentrating on his task at White Hart Lane.
"The fact he made it public that he is looking for an exit has ended up with a lot of speculation," said Villas-Boas.
"For me, it is always an honour, but I am completely focused.
"When everybody signs a contract, you are expected to do it until the end. The contract can end with you sometimes still at the club.
"But sometimes things have to happen. It has happened to me - both situations."