Watford had accepted an offer of £10m from Hebei China Fortune for the striker, who was being offered a four-year deal worth £2.5m a year, but is desperate to prove his worth in the Premier League.
He said: “I love the fans and turning down the money shows that I want to work hard for Watford, but they have to get me an improved contract and reward me for what I did last season.”
It is understood that two other Premier League clubs are interested in the striker – who scored 20 league goals in 35 appearances – but no bids have been made.
The club are back in pre-season training under new coach Quique Sanchez Flores – and the new man in charge has made a big impression on Troy Deeney.
The club skipper, who has signed a new five-year deal, told Sky Sports News HQ: “To be honest before he came I didn’t know too much about him but since he has come in he has got my respect massively.
“He’s very much on his job; he knows what we need and knows what he wants and he gets his points across very easily and I think that shows how good a person he is. Everyone knows their job straight away.
“You have to have respect for anyone that comes in but especially someone that has worked at a higher level than Watford. Sometimes the manger might have to earn that respect but he has got that instantly. He doesn’t treat anyone differently and the work we have been doing has been real tough but really enjoyable.”
Matej Vydra has also committed his future to the club having already spent two loan spells at Vicarage Road.
He said: “Every year in the past I have changed club and I had to meet new players but now I know my future, and I know these players, so I am very happy to be here.
“Promotion last season was great and the fact that we are now in the Premier League – and that I was offered a contract – made the decision very easy for me.”