Manchester City have abandoned their pursuit of Marco Reus, which could setup an attempt to pry Isco from Real Madrid.
Manuel Pellegrini managed Isco at Malaga.
"I have great affection for him," the City boss told AS.
"I was lucky enough to guide him during his passage to La Liga. He has to continue progressing because of his youth and because of the quality he has.
"He chose Real Madrid as his destination and I am happy each time that I see him."