Newcastle loaned Toney to Scunthorpe last season, and the young striker impressed during his time with the Iron.
Toney played a role in helping Scunthorpe reach the League One play offs, and Alexander was keen to bring him back this term.
However, Newcastle agreed a deal to loan Toney to Wigan instead, which has come as a disappointment to Alexander.
“If he became available and he wanted to come back then great, but I never really got the feeling that it would happen, so I was not massively shocked when I saw the news,” Alexander said.
“I would have loved to have had him back with us again for this season, but we have got other players we are speaking to and time will tell if it is the best thing for both parties.”
Toney is regarded as one of the brighter young talents at Newcastle, but he will be under pressure to start fulfilling his potential.
Toney is now 21, and will need to start scoring frequently at League One level to prove to Rafael Benitez he is worthy of a first-team role in the future.
At Wigan, Toney will be part of a side who are among the favourites to compete for League One promotion this term.