The City manager has recently been linked with Barcelona alongside CEO Ferran Soriano and director of football Txiki Begiristain, who are both former Nou Camp employees.
Those claims came after pressure increased on current Barcelona manager Luis Enrique after a reported row with star man Lionel Messi. Pellegrini has refuted these rumours though, stating he wants to sign a new contract at the Etihad.
"I am very happy here and I hope I will continue. I have a contract this year and one year more," said Pellegrini, whose side are currently joint top of the Premier League and face Everton this weekend.
The Chilean manager also gave an update on the transfer deal for Wilfried Bony, who looks set to join the champions in a £30m switch during the January transfer window.
There had been claims that City would fail to comply with the Financial Fair Play rules currently in place, but the manager has allayed those fears by confirming that his side will be selling Spanish striker Alvaro Negredo to fund the deal.
Negredo is currently on loan at Spanish side Valencia, who will pay £23.5 million for the striker in the summer. The Premier League champions are limited to a £49 million net spend this season as part of their punishment from UEFA for breaching FFP regulations.
"We sell already Alvaro Negredo so we have some money to spend," said Pellegrini.
"We are going to replace Alvaro Negredo because it was the decision that we took in the moment we sold him. We need another striker so we are going to find which is the best player to bring in."