Paterson, who spent the last six weeks of the season on loan at Bristol City, and Town team-mate Oliver Norwood were included in Michael O'Neill's Northern Ireland squad for friendlies in Uruguay on May 30 and Chile on June 4.
"I'm very proud to play for Northern Ireland, and I didn't make this move lightly," Paterson told the Huddersfield Examiner.
"But I felt the timing of the games wasn't right for me personally.
"I have had a few injury problems this season.
"And having gone a couple of weeks without regular training, to then travel the distances involved and play at the level involved would be testing.
"I need to look to my club career, and I want to be right for the start of pre-season."
Paterson scored six goals in 26 appearances for Town last season and one goal in eight for Bristol City.
He added: "I'm not going to make excuses - I haven't played as well as I can.
"I was unable to get the number of games I wanted or needed, and I know my future is uncertain.
"But at this stage I am a Town player and I am ready to knuckle down."