The Premier League outfit parted company with Paolo Di Canio on Sunday, after a poor start to the season left them stranded rock-bottom of the English top-flight with one point from five games.
But, while Zola is reportedly one of the names under consideration for the Stadium of Light post, the 47-year-old says he is keen to finish his work at Watford.
"Of course I am flattered that I have been considered but I am really happy over here and like what I am doing," he told Sky Sports News.
"I think my growth as a manager has been massive and so I want to fulfil this task."
Zola started his managerial career at West Ham in 2008, but saw his contract terminated by the London club in May 2010 after narrowly avoiding relegation.
He subsequently took the reins at Vicarage Road in July 2012, and immediately guided Watford to the play-off final - where they lost 1-0 to Crystal Palace at Wembley.
Watford are currently fifth in the Championship, having lost just once in the league this season.
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