Liverpool sold Suarez to Barcelona for £75 million during the summer transfer window, despite the PFA Player of the Year being heavily linked with Los Blancos. But Zidane, who currently coaches the club's B team, Real Madrid Castilla, insists the club never wanted him.
The Frenchman said: "There are always reports linking the big players with Real Madrid, but we had no contact with Liverpool regarding Suarez in the summer - he is not a player that we felt we needed.
"When Real Madrid want a player we work very hard to get the transfer done, but it was not a player we wanted."
Suarez has recently been presented with the Golden Shoe award as Europe's joint top scorer, having scored 31 times to help Liverpool into second in the Premier League. His miraculous season with the Reds saw him attract attention on a global scale.
But rather than approach the Uruguayan, Madrid instead focused their attention on bringing World Cup star James Rodriguez and former Bayern Munich midfielder Toni Kroos to the club in their standout deals of the summer.
Zidane maintains the club made the right decisions, although he rates Suarez very highly.
He added: "He (Suarez) is obviously a very good player, but it was not a player we feel we needed to add to the squad. The players we acquired in the summer were exactly the players we wanted."
Suarez is set to make his Barcelona against Real Madrid this weekend after serving a four-month ban for biting Italy defender Giorgio Chiellini while playing for Uruguay at this year's World Cup.