The 20-year-old’s future has been the subject of much conjecture following the revelation that he had turned down a £100,000-a-week contract offer from the Merseyside outfit.
While Reds boss Brendan Rodgers has since moved to rule out the possibility of selling Sterling at the end of the season, a number of interested parties are undoubtedly watching the latest happenings at the club keenly, most notably Real Madrid.
When asked about Real’s reported interest in the England international, Zidane said: “We know who Raheem Sterling is, and of course we are monitoring him as a player.
“There are very few players in the world who can improve the Real Madrid squad, so it is going to make sense we monitor the progress of the best young players in the world.
“We monitored (Gareth) Bale for over a year, the same with Isco and also (Raphael) Varane.
“We monitor many of the best young players in Europe, then if we feel they have something to offer Real Madrid we will contact their club and try and make the next step.”
Sterling, who has scored six times in 29 Premier League appearances this term, will have two more years left on his contract when the current campaign draws to a close.