The Brazilian ace joined Real Madrid from AC Milan in a £60million deal earlier this summer.
Kaka said: “I was very flattered by Manchester City’s interest in January but it is just a project at the moment. And with projects sometimes you don’t know how long the investment will be there for.
“Lots of smaller clubs have periods of spending big money. But suddenly the investment stops when the owner decides to do something else. Or sometimes it stops because of other reasons like a failing economy.
“Things can be great one moment and not so great the next moment. The organisation can collapse like a pack of playing cards. I felt the time was right for a change and Real Madrid is the club for me.
“It is not about a difference of quality between La Liga and the Premier League. Real will always be a big club. Nobody can take away their history and their nine European Cups.”