Rafa Benitez's side are thought to be huge admirers of the England international and are reportedly keen to bring him back to St James' Park this summer.
Towsend joined Palace in the summer of 2016 in the wake of Newcastle's relegation and has regularly been linked with a return to the north east since the club's return to the top flight.
However, speaking after the comeback win over Toulouse on Saturday, Townsend said he has no intention of leaving Selhurst Park any time soon.
"I have got three years left on my contract. The club want me here, the fans want me here, I want to be here, so for me there is nothing to it [speculation linking him with a return to Newcastle]," he told 'Sky Sports News'.
"There is always gossip surrounding myself every summer but I don't really pay much attention to it. I'm happy here and hopefully I can be here for many years."