Benitez is under pressure at the Santiago Bernabeu following their 4-0 Clasico humbling by Barcelona last month while speculation persists about a difficult working relationship with a number of the club's senior players, including Cristiano Ronaldo.
Madrid president Florentino Perez has publicly backed the former Liverpool and Inter boss but rumours persist that his days in the Spanish capital could be numbered.
One name that has been thrown up as a potential replacement is Guardiola, who has yet to commit to extending his Bayern deal that expires at the end of the season and has also been linked with Manchester City and Manchester United.
The 44-year-old was quick to dismiss the subject at his Bayern media conference on Friday, however.
He laughed: "No, no, that would not be good. We would not fit together.
"No, there is nothing to report for you journalists."
Guardiola enjoyed great success with Madrid's arch-rivals Barca, winning three La Liga titles, two Copa del Rey crowns, two Champions Leagues and two FIFA Club World Cup trophies between 2008 and 2012. He has also been an outspoken supporter of Catalan independence.
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