Former Wales boss Hughes succeeded Graeme Souness and assistant Saunders at Ewood Park in September 2004 and has impressed.
Hughes has guided Blackburn into Europe twice on a relatively small budget and the 44-year-old Manchester United old boy has been touted as a potential successor to Sir Alex Ferguson at Old Trafford.
MARK HUGHES PROFILE
Born: 01/11/1963, Wrexham
Playing career: Man Utd, Barcelona, Bayern Munich (loan), Man Utd, Chelsea, Southampton, Everton, Blackburn.
Wales honours: 72 caps (16 goals)
Management career: Wales, Blackburn
Hughes is also on the shortlist to succeed Avram Grant at Champions League finalists Chelsea.
Grant part company with Chelsea after failing to land any silverware with the club last season.
But Saunders who, alongside Souness, left the sanctuary of Blackburn to take over at Newcastle United says he may be better off staying at Ewood Park.
"I had a shock going to Newcastle," concedes former Wales striker Saunders.
"Graeme took a risk going to Newcastle but you don't realise how well Blackburn is run until you've left.
"Over the last eight or nine years since returning to the Premier League, Blackburn have steadily improved.
"Mark has done well and taken the club into Europe a couple of times by finishing seventh twice.
"But that is because of how it's run and because the chairman and the directors are very stable people.
"Mark will have the same problem at Man City that we had at Newcastle and he'll realise it should he get there."
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