Denayer was expected to join the Lions on loan after attending the Galatasaray v Kasımpaşa game at the Türk Telekom Arena.
Galatasaray ended up losing the game 2-1 and Denayer returned to England the next day without completing his move.
NTV Spor reported that City were reluctant to give Galatasaray a buy-out clause option as part of the loan.
Hamzaoğlu was however, quoted by NTV Spor as saying: “We want to see Denayer in the squad.”
The Galatasaray boss believes Denayer could still join his side before the end of the transfer window.
The 20-year-old Belgium international has also been closely linked with Marseille but the Ligue 1 outfit are unable to offer Denayer Champions League football unlike Galatasaray.
The Lions booked a place in the Champions League group stages for the fourth consecutive season after winning the league title for a record 20th time.