Mane left Liverpool last June, signing a three-year deal with Bayern Munich.
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The 31-year-old has endured a difficult time in Bavaria ever since and continues to be linked with a move back to the Premier League.
Former Liverpool midfielder Murphy thinks supporters would be open to his return, but insists the club have other priorities.
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"I think the fans would take him, but you would have to get rid of someone," he told talkSPORT.
"They have five forward, or six even, and that is a huge chunk of their budget on a player and position they don't need.
"They need midfielders. So I can't see it."
Jurgen Klopp's side have brought in Cody Gakpo for £44m and spent £85m on Darwin Nunez since Mane's departure last summer, with midfield additions now the priority.
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According to Sky Germany, Bayern are keen on offloading the Senegal international, ever since his altercation with teammate Leroy Sane.
Bayern dropped Mane for their next Bundesliga match and handed him a £250,000 fine following the incident.
Manchester United and Newcastle have since registered their interest in the 31-year-old in hope of bringing him back to England.
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Sky Germany's Florian Plettenberg has claimed Newcastle could represent a 'very hot option' for Mane.
The forward would certainly strengthen Eddie Howe's attack as his side potentially prepare for Champions League football.