Reports suggested at the beginning of the week that the Blades boss had give up hope of signing the 19 year old after a £150,000 price tag was too high.
"The Izale McLeod deal is certainly not dead," Warnock told thisisderbyshire.
"I'm looking for a striker and he is still an option. But we are not in any rush and I want to see who else is available.
"I think it would be in Izale's best interests to leave Derby. He needs a change of scene. Any deal would have to be done on our terms, though.
"We won't pay the kind of money that was mentioned when he came here on loan."