The Germany international, 21, has enjoyed another fine campaign, scoring 10 times in 20 league games to back up his 21-goal 2016-17 Bundesliga season.
Werner, who has also netted seven goals in 10 internationals for his country, has previously been linked to Madrid and Liverpool.
But Rangnick said the forward, who is contracted until 2020, would remain at Leipzig.
"Timo definitely knows he is still playing with us now and next season," he told Kicker.
"We are also in talks to adjust and extend his contract."
Leipzig sit second in the Bundesliga table, but an 18-point gap separates them and leaders Bayern Munich, who are on course to win a sixth consecutive league crown this season.
And Rangnick admits that it could take significant investment from Leipzig to reach the same level as the Bavarian giants, but they will not be paying huge transfer fees any time soon.
"We have a clear sum available, which can increase by €20 million with more Champions League participation," Rangnick said.
"But a €40 million transfer makes no sense because behind that is a player's salary, which usually happens with such a transfer. Then we have to look at our wage structure, which we definitely will not blow up.
"It's possible that we could spend €25m for a player in the next few years, but spending something in the region of €30m or €40m in this period is not possible or meaningful."