Hodge, currently playing with Lancashire County in the English domestic circuit, was targeted by the Blues after a season that won him a place in the national Test squad, but David Gilbert, the New South Wales chief executive, said it would be "a miracle" if he moved to Sydney.
"We knew from the outset it would be difficult to get him away from Victoria, because he's a Vic through and through, but it was certainly worth a shot," Gilbert told the Sydney Morning Herald. "But hearing that he's been discussing his life after cricket with Victoria while we haven't been asked about that makes me less than optimistic."
The comments are a positive sign for Victoria, who have already lost Matthew Elliott and Mathew Inness and are waiting for a decision from Ian Harvey who was a member of the Australian One-day squad till recently.
The Age reported Harvey was believed to have been offered a one-year deal and was looking at options in other states.