Reports suggested Spurs were ready to hand in-form Alli a new deal worth in excess of £100,000-per-week due to interest from the two La Liga giants.
But the 20-year-old signed new contracts twice in 2016, the most recent coming in September - tying him to Spurs until 2022 – and Pochettino does not think his contract can be extended every time there is interest.
"It is not the moment to talk about that - he is happy," Pochettino said ahead of Spurs' home match against West Brom on Saturday.
"I don't like to talk about rumours but the most important thing is he is happy, natural and performing well.
"It is not a question of improving his contract and salary every few months. He is performing well, scoring a lot of goals and helping the team achieve their objectives.
"People have been talking about him a lot in the last few weeks and that is fair because his performances have been fantastic."
Pochettino will only be without Erik Lamela against West Brom.
The winger has not played for 11 weeks due to a hip injury suffered in training, but is closing in on a comeback.
"Erik is doing well but is still away for another week to finish his recovery," said Pochettino.
"It's important he feels well and recovers. Everyone else is fit and we will arrive on Saturday in good condition."