Alonso has the unbeaten side 10 points clear of Bayern Munich and on track for a first-ever German title with eight games remaining this season.
In an interview with AFP and other media on Wednesday, Matthaeus said following outgoing manager Jurgen Klopp would be difficult for any coach and that the in-demand Alonso should stay with Leverkusen.
“Liverpool is not the right option for Xabi Alonso after this season. He has better options.”
Matthaeus spent the majority of his career at Bayern and said he would welcome Alonso as the replacement for outgoing coach Thomas Tuchel in the summer but admitted in Munich “(Alonso) would have to build a new team for the future, with new players”.
Leverkusen have won 34 and drawn four of 38 games this season. With the club in the final four of the German Cup and the quarter-finals of the Europa League, Alonso has Leverkusen on course for a treble.
“Why move to Liverpool? Why should he leave this beautiful team which makes us happy with their beautiful football, like Barcelona 12 years ago?”
Klopp shocked the football world in January by announcing he would leave Liverpool at the end of the season after nine years at the Reds, citing exhaustion.
Matthaeus said Klopp’s success at Liverpool made him a hard act to follow.
“To coach at Liverpool after Jurgen Klopp is not easy because Jurgen is a hero, he’s fantastic. What he was doing is great and what could you do that was much better?”
The 1990 World Cup winning captain praised current Germany manager Julian Nagelsmann and said the side was “on the right path” after returning to form with wins over France and the Netherlands in the last week.
However, Matthaeus did add: “In Germany, our dream and wish was that Jurgen Klopp would be the next national coach.”
© Agence France-Presse
Photo: Twitter @BayernTimes