"Of course I can completely rule that out now," Loew told reporters at Germany's World Cup training camp at Eppan, north Italy, after Spanish daily Marca claimed Real had already approached the 58-year-old German.
"Real Madrid will surely find a very, very good substitute for Zinedine Zidane.
"His resignation surprised me a little, but he is the best judge of whether the team has reached it's peak (under him).
"If he feels now is the right time, then you have to respect that."
Loew has only recently signed a contract extension with the German football federation (DFB), until the 2022 World Cup, and says he is fully focused on successfully defending the world title at Russia 2018.
Loew last coached at club level in 2004, when he was at Austrian Vienna, and under his stewardship Germany has reached at least the semi-finals of every international tournament since the 2006 World Cup.
Loew's crowning moment was in holding aloft the 2014 World Cup trophy in Rio de Janeiro.
However, he underlined his status in Germany as a superstar coach by winning the Confederations Cup last year with an inexperienced squad after leaving all of his stars at home.
Germany play Austria in Klagenfurt on Saturday and Saudi Arabia next Friday in their final friendlies before kicking off their World Cup campaign against Mexico in Moscow on June 17, having also drawn South Korea and Sweden in Group F.