The centre-back spent last season on loan with Belgian top flight side KV Oostende where his performances earned him a call-up to Steve Clarke's Scotland squad for Euro 2020.
His form led to suggestions that there may have been a second chance for the 26-year-old at his parent club, having previously been deemed surplus to requirements.
However, the uncertainty over the manager's position following the departure of Neil Lennon and the efforts of Oostende to secure him on a permanent deal after inserting an option to buy in his loan agreement saw Hendry dismiss the prospect of remaining at Celtic in favour of a return to Belgium.
Speaking on the Scots Abroad podcast, Hendry said: "Celtic's in the past now. They obviously knew about the clause and how keen Oostende were.
"There was just such a severe lack of communication on their side.
"I thought 'Do I want to put myself in a position where the club I'd be going back to doesn't have a manager, there's no real communication and on the other hand I've got a club out here who are desperate to sign me and put really good personal terms in front of me'.
"It would've been really difficult to turn down as I had a club back home where there wasn't much going on.
"It was a shame because at the end of the day Celtic are a massive club and I feel I could've had a really good impact there, especially this year with the way it's panned out.
"But, the club didn't have a manager in place and I feel they didn't have a structure. I didn't want to go back to where I was before I left Celtic.
"I put myself in a really good position last year by getting my head down and working hard - I didn't want to potentially put all that to waste.
"There was just so much uncertainty at Celtic and I couldn't put myself in that position.
"I've got a team here who really want me so I'm happy I made the decision and I'm really looking forward to the future."