Toure was quoted this week as saying he was open to “new challenges”, with his agent Simitri Seluk again critical of the club having spoken out about City last summer.
But Pellegrini says the Ivorian is happy and can fulfill his ambitions at the Etihad.
“Maybe the new challenge is at City also,” he said. “There are lot of different places you can have it but City also is a challenge and I am sure Yaya is very happy here.
“We have a project here, every year we are trying to improve. Maybe you cannot win titles every year but I think the project of the club is to improve the squad, to improve as a club so there are a lot of important things and I think it is an important challenge.”
Seluk last week described the Chilean “as a good coach, but a weak manager” while also criticising others at the club.
But the City boss said: “You already asked me at the last press conference the same question. I say the same answer. I don’t talk about Yaya’s agent. Everyone can say what he wants.”
City host Aston Villa on Saturday??and Pellegrini believes the criticism of his side’s underwhelming title defence has been unfair.
“For me you are never satisfied if you do not win the title but if you cannot win it you must try to be as near the top of the table as you can.
“I think this club is growing every year. Maybe the media does not accept that this club in the last three years won two titles and were runners-up the other season.
“This year we are very near to that position. We have five other important teams that have the same power to bring in the players they want, so every year it will be a very important fight to try and win the title.
“You cannot do it every year but I hope next year we will do it. We try to do the best we can. I don’t think it is so, so bad what this club is doing, and not just in my two years.”