The Swede has been discussing the Bhoys manager's post.
Indeed, the Swede admits there was 'a lot of substance' to talk of him taking over at Parkhead - but says he wasn't ready for the job.
The 43-year-old does not want to underestimate the Celtic post and suggests he has seen plenty of coaches who have done just that.
Larsson told the BBC: "There was a lot of substance in that but I still feel that I wasn't ready for it.
"The circumstances weren't the right ones. I think the day you underestimate the importance of the job at Celtic football club that's the day when you fail. I've seen a few coaches doing that.
"Was I tempted? Of course I was tempted but at the same time I had signed a one-year deal to manage Falkenbergs and it wasn't the time to leave them.
"We had a chat (with Celtic) and we'll leave it at that. I felt that the timing wasn't right, not for me and not for the family. I think as long as I'm in this line of work I'm always going to be mentioned when Celtic are looking for a new manager."
Could the Swede one day take over?
Should Larsson's managerial career continue at its current trajectory - the Celtic legend is making steady progress in Scandinavia - he may well be in pole position to take over the Hoops one day.
And, realistically, it's difficult not to see someone so connected to the club not take the post eventually.
But Larsson's emphasis on not underestimating the Celtic manager's job does imply he is wary of the scrutiny that comes with the role - as a man who served under the likes of Martin O'Neill and co. Current boss Ronny Deila, meanwhile, could yet be at Parkhead for quite some time to keep developing his own reputation with the Bhoys.