The former midfielder turned down an offer from Barca to replace Ernesto Valverde in January and recently signed a new one-year contract with Al-Sadd.
"I don't think it's the right time," the 40-year-old told El Pais.
"There's external noise, non-sporting issues... I don't think it's the right time. In January I told them it wasn't the moment and they haven't contacted me now.
"As a culé (Barca fan), I wish them the best. I respect Quique Setien a lot. He has a manual for playing very similar to what Barca need, which is Cruyffism. Whether the results come or not is another matter."
With presidential elections to take place at Barca next summer, Xavi now looks to be biding his time until a new project begins in 2021.
"I'm delighted to be acquiring experience, challenging myself, and of course it would be a privilege for me to coach Barca one day," he said.
And he added: "With a dream team, with Jordi Cruyff, Carles Puyol and some current players.
"I'd like to have a team of valid people who know the club, people I can trust and who are on my wavelength."