Potter was targeted by Lyon owner John Textor as his top target to replace ex-France boss Blanc, who is winless in his first four matches of the new Ligue 1 season. Textor also owns a majority 40 per cent stake in Crystal Palace.
Potter politely declined the opportunity to work with Lyon, a club he saw as an appealing opportunity but one that had come at the wrong time.
The 48-year-old has been out of work since April but wants to evaluate his options further before committing to a return to the dugout.
Potter suffered seven turbulent months at Stamford Bridge as Thomas Tuchel’s replacement before getting sacked and replaced by interim boss Frank Lampard, with the Blues then appointing Mauricio Pochettino as his permanent successor over the summer.
Potter got the Chelsea job after his impressive work over three years with Brighton, having also built up his coaching reputation with Swansea and Swedish club Ostersund, having began his managerial career at Leeds Carnegie.