Raul rejects Blackburn to stay at Schalke
"Raul has informed us that he wants to stay at Schalke and that we should turn down Blackburn Rovers' request," club manager Horst Heldt said in a brief statement.
"We have already done that and we are delighted that Raul will contribute to our success."
Raul, who joined Schalke last season after spending 16 years at Real Madrid, helped his new club win the German Cup and reach the Champions League semi-finals.
He has a contract with the Bundesliga team until next year.
Blackburn started the English Premier League season by losing 2-1 at home to Wolverhampton Wanderers on Saturday.