The 35-year-old left San Siro in 2012 after 13 successful years as a player with the Rossoneri, joining Swiss side FC Sion firstly as a player and then in a coaching capacity last season.
He was ultimately sacked in May after just three months in charge of the club, before the relegated Rosanero gave Gattuso the opportunity to head their bid to make an instant return to Serie A next season.
"I would be hypocritical if I said that one day I would like to return to Milan. I still have a lot of work to do before I can get to that bench. I try not to think about it at the moment," he told Republic.
Palermo president Maurizio Zamparini is the man responsible for appointing Gattuso to the Palermo hot seat, but despite his reputation as a ruthless operator after sacking 50 different coaches in his 27 years in the game, the former Italy international insists they enjoy a healthy relationship.
"With Zamparini there is a great relationship. I am confident that the results will give me a long professional life with him," Gattuso insisted.
"I have to think about winning the Serie B title where all the opponents are waiting for us at the gate. This is my challenge."