Drogba, 37, is under contract with the Impact for another 12 months but French sports outlet L’Equipe claimed on Wednesday night that the striker had told club president Joey Saputo he was retiring in order to re-join the Blues in a coaching role.
Hiddink, who managed Drogba during his first spell as Chelsea interim boss in 2009, also confirmed last month that efforts were being made to bring the former fan favourite back to Stamford Bridge after rumours began circulating when the pair were pictured watching the team's 3-1 home win over Sunderland together from the stands alongside chairman Roman Abramovich.
However, while the ex-Ivory Coast international is still widely expected to return to west London, he was quick to quash L'Equipe's claims, tweeting a few hours later that he remains in discussion with Montreal and that no final decision has been made on his future.
Lovely to receive these messages but I have not yet announced my retirement & am still in discussion with @impactmontreal about my future.— Didier Drogba (@didierdrogba) January 6, 2016
"[Drogba] never called Joey [Saputo] to tell him, 'I'm going to announce my retirement.' The first sentence of that [L'Equipe] article, which is the most important, is not true," said Vallee.
"Maybe Drogba is going to retire. That's an option for him. But right now, if he's doing it, he never said it to our president. He never announced it to Joey first."
Drogba originally joined Montreal in July on a Designated Player deal after ending his second spell at Chelsea and went on to score 11 goals in 11 regular season games to help the Canadian outfit secure a third-place finish in the Eastern Conference.
The physical front man also netted once in three playoff appearances before his side’s hopes of a first-ever MLS Cup title were ended with a 4-3 aggregate defeat to Columbus Crew SC in the Conference Semifinals.