The former Toffees goalkeeper does not think the Spaniard is the right man for the Toffees.
The Spaniard won the Champions League and FA Cup with the Reds, whom he left in 2010 and has since managed Inter Milan, Chelsea, Napoli, Real Madrid Newcastle and, most recently, Dalian Professional.
He has, somewhat controversially, moved into pole position ahead of former Wolves boss Nuno Espirito Santo to fill the role, following Carlo Ancelotti’s return to Real Madrid earlier this month.
However, the potential appointment is already generating considerable opposition from the fanbase and former goalkeeper Southall, the club’s all-time leading appearance maker with 751 in a 17-year Toffees career, is among them.
“I think Rafa Benitez is a good manager, but is he right for Everton? No. Not a chance! He’s Liverpool, the fans won’t have it,” he told talkSPORT.
“If he comes into that ground, he’s going to have to produce something special, and at the moment with the squad we’ve got he’s going to do well to do something special there, because it’s a work in progress.
“So, for me, I would rather have Duncan Ferguson (the former Everton striker and Ancelotti’s assistant manager).
“We’re never going to get relegated and he’s a good manager, I think he’s far underrated than anyone else.
“He started before Carlo Ancelotti and put us on a good run, he’s knowledgeable in everything he does, he knows the club inside-out, he knows all the younger players, so why not give him a season’s contract?
“We’re not going to be in any worse position at the end of next season than we are now.
“But Benitez? No. A good manager in his own right, but too many connections with Liverpool.”
The appointment of Benitez, whose family home remains on the Wirral, would be almost universally unpopular with fans, who have never forgiven the 61-year-old for his “small club” comment about Everton after a Merseyside derby in 2007.
Everton insist there are a number of candidates still under consideration, with former boss and current Belgium coach Roberto Martinez another in the frame.
However, Benitez is understood to by the preferred option of owner Farhad Moshiri, who is considering taking the biggest gamble of his five-year tenure at Goodison.