Reports on Monday morning named Warnock as the frontrunner to replace the sacked Billy Davies on a short-term deal until the end of the season.
Saturday's 5-0 defeat to Derby at the iPro Stadium saw Forest's run without a win reach eight matches - a streak which has seen them go out of the FA Cup to League One side Sheffield United and drop out of the Championship play-off places.
The 65-year-old Warnock, who has been out of management since leaving Leeds in April 2013, held talks on Monday but then ruled himself out of becoming their next manager to cap a turbulent day at the Sky Bet Championship club.
He told talkSPORT: "I did say, if the right (club) came up I'd take it...and with nine games to go, possibly 12 games - with the play-offs - it was ideal for me
"The talks started well, but in my eyes deteriorated.
"The experience I've got, let's not forget, the last three club's I've been a bit unlucky, I've had three new owners, so I've got an idea of owners and what they want and how they work
"In the end I didn't think I was the right one."
Forest's owner and chairman Fawaz Al Hasawi revealed that academy manager Gary Brazil would take charge of first-team affairs until a permanent appointment was made, starting with Tuesday night's game against Charlton at the City Ground
Former QPR and Leeds boss Warnock stressed he had no problem with Al Hasawi but claimed that some managerial decisions might be difficult under Forest's structure, and he believes Gianfranco Zola or Stuart Pearce could suit the job in the long term.
He added: "They've put Gary Brazil in tonight and for the moment that's what they want.
"I'm sure someone like Pearce or Zola will come in, somebody like that will end up there
"Stuart Pearce would be ideal. But it wasn't for me really.
"When you've got 10 games, possibly 12 games to go, when you've got experience, or you've done the job, you've got to do it how you want to do it and I didn't see that if I'm honest with you
"(The chairman)'s a nice guy, I got on alright with him. There's just certain criteria that even I can't do, even if it's the right club.
"It wasn't fair really because you're not guaranteed to win games and you lose one or two games in that situation and it could become a little embarrassing behind the scenes.
"I didn't want that, I wanted a clear road ahead to do what I wanted.
"If I can't 100 per cent go into it knowing I'm going to be able to manage as I manage then I can't commit myself.
"In the end it just didn't add up to me. I thought I'd be doing it for the wrong reasons.
"It wasn't the financial part of it, it was the opportunity to get a club back up through the play-offs."
Warnock believes dealing with foreign owners at football club's could be difficult as many of them are from business backgrounds and not footballing ones.
He said: "I don't want to be accused of being anti-English, I'm not anti-English.
"But there was no-one you could talk to - at the club - English-wise that knew about football, that you could have a conversation (with) about getting things done.
"They've got to alter that issue because, it's alright having good intentions but you've got to know the rules and regulations and know where you're going.
"It seemed very, very difficult to get anything done at the club.
"It's just natural for them, it's how they are in life.
"It's almost how they're brought up, this is how we deal in the business world and they're successful in the business world so they carry on and take it on board.
"But in football, it's not like that. Yes, it can get you so far but it can't get you to the very top.
"Even at Manchester City, they let him (manager Manuel Pellegrini) get on with it and they're spending billions.
"It doesn't work like that. In the end, they have to be very careful.
"This guy's put a lot of money into Forest and they (the fans) like him, they think he's a good chairman and I haven't got a problem with that."
Source : PA