The attacking midfielder is continually being linked with a move to a bigger club following his fine performances in 2012-13 and revealed earlier this week that Manchester City and Real Madrid are keen to lure him away from his current club ahead of next season.
Bayern has already secured the services of Mario Gotze from Borussia Dortmund and Jan Kirchhoff from Mainz for next season, and if it were up to Heynckes, the Spain Under-21 international would continue his career at the Bundesliga giant as well.
The 21-year-old has a contract with Malaga until 2016, but he has a 35 million euro buyout clause.
"Who should Bayern sign? There are some very interesting players out there, like Malaga star Isco. He's a class act in midfield," Heynckes told Kicker.
Heynckes announced his retirement from coaching after guiding Bayern to a historic treble this past season. The Bavarians had previously already appointed Pep Guardiola as his successor.