It is no surprise to hear that Rafa Benitez has apparently rejected the head coach position at Atletico Madrid. He has repeatedly said that he would like to manage in the Premier League again as better fits his working requirements. Moreover his family is settled in England. He is likely to reject other overseas overtures even from a very big club, if it means managing again in the premier league with a decent club (or preferably a big one).
However, it should be noted that Rafa Benitez is a workaholic and waiting a whole season without working is highly unlikely for him. He certainly will not rush into a decision like he did with Inter Milan, but it is probable that he has a Plan B should there be no job offers from the Premiership. Regrettably, Rafa would probably accept an offer from a good club overseas - from Spain more likely. However, it would have to be an irresistible deal. So, while the Atletico Madrid deal may be dead for the time being, there could be more movement in a few months time, if they come up with the right deal. It is not just players who are subject to transfer speculation, it is managers also.
Former Liverpool boss Rafa Benitez turns down Atletico Madrid offer - Report (From Goal.com)