The 39-year-old striker, who scored the extra-time penalty that secured Palace's promotion to the Premier League via the play-off final, is keen to have one final crack at the top-flight.
"There has been a lot of rumours around and I've been offered a couple of really testing offers but, at this stage in my career, if there's any chance of staying in the Premier League then that is the place to be," Phillips told Talksport.
"I'm not sure if a Championship club can tempt me. I know what sort of role I'm going to be playing, it's a bit-part one, and I'd rather be doing it in the Premier League."
Phillips can leave Palace on a free transfer with his previous contract at the club having expired but he believes he is close to agreeing a new deal to remain at Selhurst Park.
"Ian Holloway isn't afraid to use me," he added. "He wants me at the football club and I want to stay. Hopefully we'll get it sorted by the end of the week."