The 23-year-old has struggled to make his mark at Anfield, but Hodgson is not about to sell the Netherlands international.
He told reporters: "I'm afraid we're in the realm of speculation. You know better than I how many stories you're getting every day and many of them are unfounded - many are attempts from people to get their players in the spotlight.
"We've had no written or formal offers for Ryan Babel and he's a player who I'm expecting to play for us."
Meanwhile, Serie A new boys Cesena are poised to complete the signing of Brazilian goalkeeper Diego Cavalieri from the Reds.
The 27-year-old has made just ten appearances in two seasons at Anfield and is desperate to move on to gain regular first-team action.
Hodgson confirmed: "Diego has done a marvellous job for the last two years.
"He's a very good goalkeeper and a very good person, but he made it clear to me at the start of the season that, after two years of watching Pepe Reina play every week he might, if he's not careful, lose his goalkeeping ability or his status as a first-team goalkeeper.
"He made it clear he'd like to leave and find a club where he'll be able to play on a regular basis."
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