Raul has said he will see out his Schalke contract after a bid from Blackburn Rovers.
Rovers manager Steve Kean said on Thursday the striker, 34, was keen on the move to England, but the German side had rejected their bid.
But on Sunday the former Real Madrid told the Schalke website: "I'm definitely staying at Schalke.
"My wife and children are fully integrated into life in Germany and I am proud to play in the Bundesliga."
Raul's Schalke contract ends next summer. He joined the club last year after 18 years at Real Madrid.
The former Spain international has been a success at the German club, scoring 14 goals in 36 league games.
His five Champions League goals helped his side reach the semi-finals where they lost to Manchester United.