The 26-year-old stormed to the championship in 2005 and 2006 with Renault before moving to McLaren for last season's campaign in which he came third behind eventual winner Kimi Raikkonen and team-mate Lewis Hamilton.
He has since moved back to Renault but has dismissed talk of him claiming a third world crown.
"Today that idea is madness," Alonso told sports programme El Larguero.
"You have to be realistic and this year they (Renault) were a long way behind and it's too big a leap.<
"But everything is possible, they have to make the car better.
"We opted for Renault because it is the most optimistic choice for 2008 and with possibilities to do good things.
"However, every team has to make a huge step up in quality for next year because McLaren and Ferrari won all the races this year."
Alonso admitted that when the 2007 campaign finished, he had no idea where he would be racing in 2008.
"I didn't know whether to stay at McLaren or what I was going to do," he added.
"We looked at everything and in the end we decided it would be better to go our separate ways.
"From there I started looking for teams. Almost all the teams approached me, but not Ferrari.
"It wouldn't be right to say that I want to sign for Ferrari barely a fortnight after I signed for Renault but of course it would be nice if I could go there one day."Well Alonso does not have a chance and he is very honest.
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