The striker's future at Meadow Lane has been under the spotlight this summer, with rumours of a potential move to Stevenage surfacing in the press.
Sheridan has a glut of forwards at his disposal aside from McLeod including Adam Campbell, Jonathan Forte, Jon Stead and loanee Vadaine Oliver.
"Izale's an experienced player and has been a very good player over the years," Sheridan told the Nottingham Post.
"I don't want to patronise or be clever with anyone, I think Izale needs to be playing football.
"I've spoken to him. It's important he gets a regular place somewhere and I can't offer him that here.
"I've explained that situation to him and if a club comes in then I wouldn't stand in his way."
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