The former Chelsea defender had been strongly linked with the post at Selhurst Park, which has been vacant since Ian Holloway departed almost a month ago.
But Petrescu told Sovetsky Sport: "First, I want to say that I do not conduct negotiations with other clubs when I'm under contract. If they spoke to someone, it was only to my agent.
"Secondly, I love England, I am pleased that the English clubs remember my name, and I would work there, but right now it's impossible.
"The contract with Dinamo is for another year and a half and I'm happy here. I want to stay."
Former Stoke boss Tony Pulis has emerged as the 2/9 favourite with Sky Bet to take the reins at Palace, who are six points adrift of Barclays Premier League safety ahead of Saturday's trip to Hull.
Former Real Madrid assistant manager Aitor Karanka was heavily linked with the post, only to take the managerial reins at Middlesbrough last week.
Another reported target was Wales manager Chris Coleman, although he too is now out of the running after signing a new contract with the Welsh FA during the international break.
Former Inter boss Andrea Stramaccioni and, most surprisingly, former Palace boss Iain Dowie remain reported possibilities for the south Londoners, although Pulis has now emerged as the frontrunner.
Pulis was installed as the early favourite when Holloway left the club on October 23 with the Eagles having taken just three points from their opening eight games.
Palace have claimed just a single point more in the three games since with caretaker boss Keith Millen in charge and sit bottom of the league ahead of the clash at the KC Stadium on Saturday.
Pulis guided Stoke to promotion to the Premier League in 2008 during his second spell in charge and engineered the club to five mid-table finishes as well as the FA Cup final in 2011 before departing by mutual consent last summer.