The Napoli boss has conceded defeat in his bid to retain the goalkeeper's services, admitting that the club are unable to meet his wage demands
The Spain shot-stopper played 30 times in Serie A this season for Partenopei, contributing 10 clean sheets as his side claimed third spot behind Roma and champions Juventus.
Despite the 31-year-old impressing at Sao Paolo this campaign, Benitez has ruled out the possibility of him continuing at the club into next season, despite Liverpool spending €10 million to bring Simon Mignolet to Anfield last summer.
"Pepe has two years left on his contract with Liverpool, so I think he has to go back and stay there," the former Valencia coach told talkSPORT.
"We cannot afford his wages at the moment. The Premier League is very important and we can't pay big salaries in another country like they do in England. So Pepe will go back and he will fight for his position."
Benitez, who spent six years as Liverpool boss from 2004 to 2010, winning a Champions League and FA Cup, also revealed that he himself intends to return to coach in the Premier League once more later in his career.
"It's clear that I would go back in the Premier League," the 54-year-old continued.
"I'm happy in Naples. I'm fine with the fans, with the city, with the president and the players. it's all good here, but my family lives in England.
"My daughters go to school there and they will attend university there in England. My idea is, in the future, to return to the Premier League. At the moment I'm happy in Italy, and everyone is supporting me in this adventure, but you never know."