Speaking on Wednesday night’s Sportsound, the Tannadice boss was asked about Wallace after newspaper reports had linked the player with a reunion with his former Hearts team-mate.
The Rangers left-back is out of contract at the end of the season and certain to move on after eight years at Ibrox.
Neilson, while admitting he was a fan of the player, revealed there were no plans to swoop in for the 31-year-old.
“I saw that this morning. I know Lee well from my time at Hearts. He’s a very good player.
“It was news to me when I saw it in the papers today. He’s a fantastic player.
“I’m sure Lee will have a lot of options. Whether it be Scotland, England or abroad.
“He’s a very, very good player so there will be a lot of teams interested in Lee.”