The midfielder, now with Bayern Munich, revealed that Sergio Busquets' emergence at Barça saw then-Camp Nou boss Pep Guardiola decide against a deal.
"Guardiola chose Busquets - he wasn't proved wrong"
"It happened not long before I left for Real Madrid," explained 35-year-old Alonso, who is to retire from football at the end of the current season.
"Liverpool told me that they wanted to sell me, [the Reds' manager at that time, Rafa] Benítez too, and Pep showed an interest in my situation.
"He wanted to sign me because, as he told Rafa, I was the type of player who would fit his [playing] model. But he had doubts because Busquets had just come through and had the makings of a tremendous player.
"Guardiola chose him, and he wasn't proved wrong."
After ending his time at Liverpool to go to Real, Real Sociedad youth product Alonso spent five years in Madrid before being taken to Bayern by Guardiola in 2014.
Alonso up against Real in Champions League next week
The Bundesliga outfit face Real in the second leg of the Champions League quarter-finals on Tuesday evening, with Los Blancos leading 2-1 from the opener.